WEBVTT
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Hi, everyone, and welcome to this exciting episode of the Scottish Widows Workplace Pension Podcast.
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And today we are joined by Pension Royalty, the longest serving pension minister in recent UK political history, having just over five years in role, and a good friend of mine, so I'm delighted to have him on today.
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Welcome to the podcast, the one and only Guy Opperman.
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Wow, what an intro.
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It's a bit like listening to the Queen meets your mum meets some sort of fan base.
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Thank you very much for having me on.
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It's a delight to be here.
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Well, the intro is going to get even worse because I'm going to get AI to do it.
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So let me first of all get the official bit out of the way.
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Today's podcast is aimed at those interested in UK pensions.
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I'll be packed full of pension goodies, but we will contain no financial advice.
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Now, Guy, many of our listeners will know who you are, but we do get lessons from all over the world.
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So I've got my AI buddy to do 150 word bio in a chatty pod intro fashion.
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So let's go.
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If you want to understand how UK pensions really work and why they work the way they do, today's guest has been right at the centre of it.
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Guy Opperman spent more than five years as UK Pensions Minister, making him the longest serving Pensions Minister in modern history, a rare bit of continuity in a role known for constant change.
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During his time in office, Guy didn't just keep the seat warm.
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You'll be glad it says that.
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He drove through Pensions Schemes Act, pushed the long-awaited Pensions Dashboards from idea to reality.
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More on that later.
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He laid the groundwork for collective defined contribution schemes, expanded auto enrolment and toughened up the system against pension scams, all while championing financial inclusion and better outcome for savers.
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Before politics, he was a criminal barrister, and since leaving Parliament, he stayed deeply engaged with pensions industry.
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Known for his energy, policy depth and hands-on approach, Guy remains a powerful voice in the future of retirement saving.
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Well, Guy, with five years in role, that's a lot to squeeze in to 150 words.
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How was that?
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I love ChatGPT.
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That was amazing and even more of a eulogy, frankly, than your original intro.
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So I'm loving it.
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Keep going.
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Well, just to be fair, that was co-pilot.
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Sorry, co-pilot.
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There are other providers out there, aren't there?
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Just to keep it right.
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So we're here at a Scottish Widows event today with some of our employer clients to share your thoughts on Pension Vision 2030.
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What will the pension landscape look like at the end of the decade?
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But I'd like to start off by looking back.
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So co-pilot has pulled out a few key deliverables from your time in office.
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So let's just take a run through them.
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Give us your summary and score of how well they have landed or are delivering.
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So let's go.
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Number one, Pension Schemes Act.
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Pretty good.
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Created Dashboards, created CDCs, reformed DB.
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Obviously, those first two are works in progress.
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But without the act, nothing happens.
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Okay.
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So my next two are the two you mentioned there.
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So Pensions Dashboards.
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Where are we?
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So on its own, listen, the old Chinese philosopher says, the longest journey starts with the first step or the thousand-mile journey starts with the first step.
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I think that's LaoZhou.
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But it's going too slowly, bluntly.
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I love and adore Chris Curry and other people at the Dashboard team.
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But obviously, the old joke that we both say is I hired him on a two-year contract six and a half years ago, and we still haven't delivered anything.
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And I just am saddened that we are not doing commercial dashboards because to my view, that is very, very important as well.
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Okay.
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Well, as it happens today, we will also be recording a live event with Chris Curry in front of our employer client.
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So we'll get the questions from the floor and we'll find out from Chris exactly where we are.
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That will be alongside this podcast.
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CDC?
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A work in progress again.
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I tell a good story, I think, about traditionally I would go to CDC events at PLSA and all various events and no one would come.
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There'd be three men and a dog and the dog was in the wrong place, right?
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And now it's changed though.
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As multi-employer comes to the fore, there are a lot of multi-employers and single employers who are now looking at this.
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Now, it's a long way to go, don't get me wrong.
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And if we're talking up to 2030, then that's the sort of timeframe I think is realistic for CDC to possibly come into existence.
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But genuinely having an alternative third way to DC and DB is, in my view, a good thing.
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And for some employers, particularly, I think union backed employers, I think it's a really, really good thing.
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And I've seen and lived through the Royal Mail experience.
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It's a fantastic deal.
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Yeah.
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Okay.
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Yeah.
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Yeah.
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There's definitely a lot of talk about it.
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There's a lot of talk about different figures, about how much extra income you get and all that kind of stuff.
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I don't know if that clouds the water a little bit.
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I think it does a bit.
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And I think to say, oh, you're going to get 60% more, 50% more.
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That's a stupid way of doing it, in my humble opinion.
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I get how departments like to spin stuff.
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I'm not so naïve as to not understand that.
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But it's a wrong way to say, you're going to guarantee better situation, because that's just not the nature of the beast.
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What I do think is, you will get a better situation than a pure DC, if it's properly run, basically.
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Now, but obviously, there's a lot of ifs and buts that go as part of a CDC, and you've got to be a different, it's a different beast, basically.
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Yeah.
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Yeah.
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So cool.
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So by 2030, I think we might have a better feel for what's available.
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You'll have a lot more CDCs in that space.
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And if you don't, the answer is, it has not then progressed and various employers have looked at it and said, no, thank you.
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Yeah.
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Expanding auto enrolment.
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It's not going to happen now, hurry.
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I welcome the pension commission.
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The problem is always Treasury.
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And the problem is Treasury will struggle to authorise greater burdens on employers leading up to a general election or post a general election.
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And given the whatever your views on politics, and I'm out of politics now, I stress.
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And I think the Labour government had done a good job in the world of pensions, by and large.
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But the difficulty is by raising NI, by doing the Employment Rights Act, they have put a lot more burdens and other taxes on to employers.
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And if you want growth, you try not to put more burdens on employers.
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And that is an issue, which means and I've got I've had the scars.
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So let's criticise my government.
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You know, the 2017 auto enrolment review came out in 2017.
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It was the first thing that landed on my desk when I became minister.
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And it still isn't in practice.
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And in fact, I don't see this government bringing it in at all.
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So that is a good example of a positive change to auto enrolment agreed on a cross party basis that no one's implemented.
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And then the private members bill was much later than that, wasn't it?
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I literally had to draft the private members bill myself.
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And obviously, I completely support everything my government does.
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But at the same stage, I was working behind the scenes to ensure the private members bill came into existence and was in long negotiations with Rishi, who's a friend of mine, and said, look, you have to do this without a shadow of a doubt.
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And finally, we got it over the line.
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Right.
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But it's not happened.
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You've got to implement it.
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So basically, that requires treasury to implement a statutory change.
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So it's to bring in younger people, reduce the-
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Go to the first pound.
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It would help younger people.
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It would help women.
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It would help red wall.
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It would help disadvantaged areas.
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It's a fantastically good thing, but it is a bigger burden on business.
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And treasury keep blocking that.
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And it doesn't matter which political persuasion is in government, treasury block stuff.
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Okay.
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What about toughening up on pension scams?
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I think we've done a pretty good job.
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Many would argue we've gone too far in some respects because things like transfers are really, really hard at the moment and they want to try and make that easier.
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I'm pleased with the way we've made progress.
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There is always more to be done on pension scams because scammers constantly evolve.
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Sure.
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And I wonder at times if the whole thing about it's really hard to do transfers is overdone.
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So I just looked at a publication today, you know, for Scottish Widows transfer out average time is 9.2 days.
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So that's pretty good.
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As far as I'm concerned is if you said to somebody, look, in two weeks time, you can get your pension out of X into Y, everyone will go, fine.
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I mean, unless there is a...
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If it's a or a go standard stuff, then it works well.
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And the vast bulk of it is or a go standard stuff.
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So indeed.
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Yeah.
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Cool.
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Something that was specifically on your agenda was championing financial inclusion.
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So rather than just being the pension minister, you're also minister for financial inclusion as well.
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So I love that element of the role.
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So I used to say I do my day job is pensions, but my night job was financial inclusion.
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And I loved trying to create products and capability for the masses to enjoy the financial services that we all take for granted, whether that is insurance, whether that is access to private savings, whether that is ability on credit and things like that, whether that is on credit unions and community banks, one of which I set up in Northumberland.
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It is a difficulty because I'm the only minister who ever done that job.
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There is no financial inclusion minister anymore.
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However, to be at their credit, the Labour government have done something that I wanted to do, and which I couldn't get through with government, which was they have said that they're going to include in primary education, financial education.
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Now, we managed to get into secondary, but I loved and adored projects like the Lifesavers Project that we did with Virgin Money and with the Church of England, which is putting banks in schools.
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Amazing, positive change, whereby you get kids on a Friday running a bank in the school, then they would go home to mum and dad, particularly in the deprived areas where we set up the banks and say, mum and daddy, do you have a savings account?
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Because I'm saving for Christmas, I'm saving for a rainy day.
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And the positive change in some of the estates where I went to see, where then the mum and dad would then get signed up for a bank account.
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Just amazing.
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Yeah.
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And you know what?
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We used to have that in Scotland in the 70s, Scottish Savings Bank.
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So I used to go to school with five pence and that would get put into my bank account.
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It remains a crime in this country that we have 11 million people who don't have a hundred pounds saved.
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We're a first world country.
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And the things that most cause you to go into bankruptcy, difficulty or disaster are your car breaking down or your washing machine breaking down because you don't have the money for the fiscal shocks that hit you.
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And we're not a nation of savers.
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That is a practical reality.
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We need to change that.
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Okay.
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So beyond these things that we've just discussed there, any standout moments from your time in office, things that you look back fondly on that maybe didn't make the main headlines?
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Trying to get super funds over the line.
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I love those.
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I think they're fantastic.
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And obviously this government is now taking those forward.
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What's your definition of super funds?
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It's a DB consolidator.
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And without a shadow of a doubt, we need them and it breaks up an insurance cartel.
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At the moment, the only place a DB fund can go is down the route towards an insurer.
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It's going to be amazing when you break that up.
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It's going to really improve the economy.
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It's going to help a whole bunch of companies and get members better outcomes.
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So I'm a massive fan of that.
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It took me ages to try and get it over the line.
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We're getting it into the secondary legislation at the present stage.
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Why will it make these changes?
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Because at the moment, if I want to go to a DB buyout, I have to pay 110 percent, right?
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So I've got to be fully funded, and I've got to give the insurers 10 percent.
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And that's just the premium basically.
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A super fund will be allowed to do things at about 105 to 106 percent, okay?
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Which means if you're a company who is heading to a effectively buyout or you want to go get out of your DB, of which there's about 300 and there's a pipeline of about 400, 500 billion pounds worth heading down this route, then you're in a position you've got an alternative for the first time.
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And that can improve outcomes for members, because insurers pretty much only invest in guilds and bonds.
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Secondly, you'll be in a position that the company, the corporate, will suddenly not be giving away 10 percent of its insurance DB for no benefit whatsoever.
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So they will then be able to reinvest in the business or really promote things in the business in a different way.
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It's a very important change, a massive impact upon the UK economy, and it will free up cash in a way that is not presently expected.
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So if you're a CFO of a business heading to a buyout, you're thinking, why on earth would I do this?
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I can get out and do much better, and I can then invest money in the business.
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I can actually grow this business, grow the UK economy, and to be fair to the Labour government, they've really seen that as a positive driver of growth.
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Okay, cool.
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I haven't seen too much talk about that in the press, so it seems to happen in maybe actual world.
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It's going to, 2026 to 2027, you will see significant change in this space.
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So that's the DB space.
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The things I'm also pleased about would be the consolidation.
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When I started, we had 87 master trusts, we're now down to what, 32, 33.
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LGPS were 85, they're down to six now.
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DB is obviously consolidating.
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I think with consolidation, you get better outcomes for members longer term, you run things better, you can get better rates.
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That's the natural progression in my view and driving that forward, I think is a good thing.
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I wish I'd done more on things like simpler statements and the orange letter.
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I wish I'd been able to really drive those things forward.
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Simpler statements worked for a bit, but then the machine took over and they sort of died to death.
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Right.
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Well, we'll maybe come on to that in just a minute then, because one of the things behind the headlines I'll always remember is you're coming out with me to meet a couple of employer clients.
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Once on a retirement vehicle, where I got one of my colleagues to give you a pension education session.
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I was petrified, but you were in there with the rest of the employees, listening and learning and finding out about pensions.
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And the second time was going out to meet Ian and Roy at Jagger Land Rover, to find out what it's actually like to run a DB and DC pension scheme, and what the effect of all these regulations were on people running schemes.
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And how time got allocated in businesses.
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So a couple of really fascinating meetings.
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Do you remember them?
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I do.
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And I mean, I remember those ones well.
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I remember going to see Jagger Land Rover.
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I remember the lovely young man that you had basically interviewing and educating me.
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I thought he did a great job, so I hope he's still with the business.
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He's moved on to bigger and better things.
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But the simple point is, I love what you and Scottish Widows have done to really change engagement and there's a massive hat tip to your good self.
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So we're in London Bridge filming Overlooking the Globe and City of London.
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And literally about 400 yards away is the Arches, where we filmed an amazing campaign at about 10 o'clock at night.
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And I had to say to my wife, I'm not having an affair.
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I'm genuinely going off at night time on, I think it was a Saturday night or something as well.
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Or a Sunday night.
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I think it might be a Sunday night.
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You'd been at Pilgrim's Pizzas.
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Just genuinely to then project stuff onto the wall about the pension, pay your pensioners some attention, all the other campaigns that we were running at the time.
00:15:52.062 --> 00:16:03.042
And I genuinely think you guys have done more for pension awareness in the wider sense of the world in a really innovative and left field way than any other firm.
00:16:03.222 --> 00:16:05.542
And great credit to you, seriously.
00:16:05.542 --> 00:16:05.982
Oh, great.
00:16:05.982 --> 00:16:08.622
And it was really fab having your support.
00:16:08.622 --> 00:16:09.842
But also we did the bus together.
00:16:09.842 --> 00:16:11.182
We did the bus.
00:16:11.262 --> 00:16:12.222
I can't remember where.
00:16:12.222 --> 00:16:14.522
Somewhere in North London, I met you.
00:16:14.522 --> 00:16:16.522
I want to say like Watford Way, something like that.
00:16:16.522 --> 00:16:22.622
It was a film utility warehouse we went to.
00:16:22.622 --> 00:16:30.122
Going to meet local businesses and just trying to educate them, enlighten them and doing things in a different way.
00:16:31.122 --> 00:16:39.962
I did feel slightly like I was part of some aging rock band on a bus driving up and going, hello Watford, it's good to be back.
00:16:39.962 --> 00:16:42.042
We are the aging pension gang.
00:16:42.042 --> 00:16:47.222
Now we're going to enlighten you and take you on places and imagine yourself in ten years time.
00:16:47.222 --> 00:16:49.702
We've got loads of Gen Z people now, so it's fine.
00:16:50.862 --> 00:16:51.962
We're just in the background.
00:16:51.962 --> 00:16:56.042
I should stress, I'm in a suit and Robert is dressed in very trendy outfit.
00:16:56.042 --> 00:16:57.282
He really is.
00:16:57.282 --> 00:17:00.462
That belies his years is my polite definition.
00:17:00.462 --> 00:17:03.982
We'll get a photo at the end and people can make their own minds up.
00:17:03.982 --> 00:17:05.342
So, so brilliant.
00:17:05.462 --> 00:17:07.302
And that was some of the highlights.
00:17:07.302 --> 00:17:12.362
But what about the final days, the end of days, the resignations, the chaos?
00:17:12.362 --> 00:17:15.942
It was absolutely mad.
00:17:15.942 --> 00:17:17.842
Give me two minutes and I'll try and tell the story.
00:17:18.002 --> 00:17:22.742
Because, so I had done the job for five years.
00:17:22.742 --> 00:17:28.842
I'd been to see Boris over the summer and had said to him, look, you have to change.
00:17:28.842 --> 00:17:30.602
He refused to change, obviously.
00:17:30.602 --> 00:17:32.582
And he said, I can't apologize, can't explain.
00:17:32.582 --> 00:17:33.602
I just don't do that.
00:17:33.602 --> 00:17:36.082
And if I do that, I'll be crucified.
00:17:36.082 --> 00:17:38.602
And I was thinking long and hard about my role.
00:17:38.602 --> 00:17:44.262
And it's a big deal to turn around to an elected Prime Minister and say, I'm sorry, I can't serve in your government.
00:17:45.202 --> 00:17:50.602
But I went to see him and I told him my concerns, and then ultimately I resigned.
00:17:52.842 --> 00:17:54.822
And I understood the consequences of that.
00:17:54.822 --> 00:17:56.622
You know, that's a very serious thing.
00:17:56.622 --> 00:17:59.762
So you see when you say went to see him, where do you go and see him?
00:17:59.762 --> 00:18:02.422
You normally go and see him in his room in the House of Commons.
00:18:02.422 --> 00:18:06.142
The Prime Minister has a room sort of just behind the Speaker's chair.
00:18:06.142 --> 00:18:07.122
There's some rooms.
00:18:07.122 --> 00:18:11.322
Prime Minister and the Chancellor and a few others have rooms there that they do meetings in.
00:18:12.042 --> 00:18:16.802
And I've met many Prime Ministers in those rooms on many occasions.
00:18:17.262 --> 00:18:19.962
It's behind the four Prime Ministers I served for.
00:18:19.962 --> 00:18:21.602
Obviously didn't serve Liz Strass.
00:18:21.602 --> 00:18:22.882
She fired me.
00:18:22.882 --> 00:18:24.042
Forty-two days sabbatical.
00:18:24.042 --> 00:18:29.782
I kindly enjoyed, courtesy of her spending a lot of time with my young children in Northumberland.
00:18:29.782 --> 00:18:31.902
So getting back to Boris.
00:18:31.902 --> 00:18:34.102
So sadly, I resigned.
00:18:34.102 --> 00:18:42.842
I went home to Northumberland and I remember going to my local pub in my village, having a pint and sitting out looking over Northumberland and then the phone goes.
00:18:42.842 --> 00:18:44.082
It's Friday night.
00:18:44.082 --> 00:18:47.022
I don't even resigned like 24 hours.
00:18:47.022 --> 00:18:56.922
And it's the chief whip who's a mate of mine, Chris Heaton Harris, going, I know you resigned, but we have a bill on Monday, on pensions and no one else knows anything about it.
00:18:56.922 --> 00:18:59.022
Would you come back and sort it out?
00:18:59.022 --> 00:19:02.242
Because by this stage, Boris had actually resigned himself.
00:19:02.242 --> 00:19:06.182
Would you come back and sort out this bill and also hold the fort for six weeks?
00:19:06.742 --> 00:19:17.742
So I was one of, I think, only two ministers who returned having resigned, held the brief for another six and a half, seven weeks, whilst the leadership election went on.
00:19:17.742 --> 00:19:25.242
Liz then fired me and then obviously Rishi took over and invited me back in.
00:19:25.242 --> 00:19:30.482
And I then, I thought long and hard, do I go back in after for Rishi?
00:19:30.482 --> 00:19:38.402
And it was obviously post COVID and he asked me to do a job of trying to get the country back to work after COVID.
00:19:38.402 --> 00:19:41.922
And kind of when a prime minister asks you to do that, you don't really turn it down.
00:19:41.922 --> 00:19:47.702
However much you realize this is a heavy lifting gig that is not easy.
00:19:47.702 --> 00:19:59.182
And also, I was really conscious that we were facing, because of Ukraine War, because of COVID, massive debt, massive inflation, really tough times.
00:19:59.182 --> 00:20:07.422
And there's a great line from Edmund Burke, which I believe in totally, which is the only thing necessary for evil to triumph is for good men and women to do nothing.
00:20:07.422 --> 00:20:08.782
So stick your hand up.
00:20:08.782 --> 00:20:12.482
If your country asks you to serve, don't go, do you know, it's a bit inconvenient.
00:20:12.482 --> 00:20:14.042
I've got young Hamley.
00:20:14.042 --> 00:20:17.062
I'm trying to keep a seat in Northumberland.
00:20:17.062 --> 00:20:19.222
Just go, yes, fine, I will sort it out.
00:20:19.222 --> 00:20:22.282
And if your prime minister asks you to serve, you don't say no, in my view.
00:20:22.282 --> 00:20:24.422
Okay, brilliant.
00:20:24.422 --> 00:20:29.262
And I guess the crucial question, do you still do the Boris Johnson thumbs up?
00:20:29.362 --> 00:20:32.142
Remember, we always had to do the double thumbs up.
00:20:32.462 --> 00:20:34.022
I'm not sure, I'm not sure I do.
00:20:34.022 --> 00:20:36.442
I'm in a different world, a different life.
00:20:36.442 --> 00:20:40.262
I'm enjoying, so I'm a, as you know, I'm a policy geek.
00:20:40.262 --> 00:20:46.522
I'm really interested in policy and how I can improve situations by policy changes.
00:20:46.522 --> 00:20:57.562
So I'm spending a lot of time helping corporates and in some cases countries, improve their retirement experience and in some cases, start from scratch, frankly.
00:20:57.562 --> 00:21:02.462
And I really am enjoying that phase of my life.
00:21:02.462 --> 00:21:14.402
I also am not working as hard as I was because if you're a minister, particularly a minister with a rural constituency 306 miles away, you are, you're doing 60 hour weeks.
00:21:14.402 --> 00:21:17.882
You know, I look at pictures of me at the end of the 2024 election.
00:21:17.882 --> 00:21:25.282
I was tired and puffy and overweight, frankly, and just, you know, really, really ground down.
00:21:25.282 --> 00:21:26.902
It's a very full on job.
00:21:26.902 --> 00:21:30.122
I'm working very hard now, but it's just a very different pressure.
00:21:30.122 --> 00:21:31.242
I have my weekends clear.
00:21:31.242 --> 00:21:36.062
And amazingly, my Twitter feed is really quite nice rather than as mad as it was.
00:21:36.062 --> 00:21:36.662
Yeah.
00:21:36.662 --> 00:21:41.822
OK, so we're kind of nicely eased into into what you're doing now.
00:21:41.822 --> 00:21:47.682
But I think we'll just have a quick pause and say, you know, it must have been great for you to have a bit more time with your family.
00:21:47.682 --> 00:21:49.662
So you've got a really young family.
00:21:51.102 --> 00:21:55.042
Tell us a little bit about how it felt to ease out of...
00:21:55.042 --> 00:22:00.122
I mean, I guess it's kind of awkward because you suddenly lose your job, right?
00:22:00.322 --> 00:22:03.302
It's a very robust and brutal process.
00:22:03.302 --> 00:22:11.422
One minute you are an elected member of parliament, you lose the election, you are given a three months severance package, which is three months salary, basically.
00:22:11.422 --> 00:22:12.402
That's it.
00:22:12.402 --> 00:22:13.542
And you're out.
00:22:13.542 --> 00:22:16.382
And you have to make all your staff redundant.
00:22:16.922 --> 00:22:18.562
I had to clear my office in parliament.
00:22:18.742 --> 00:22:20.722
I had to clear my ministerial office.
00:22:20.722 --> 00:22:23.862
I had to clear my constituency office.
00:22:23.862 --> 00:22:26.262
Ridiculous stuff like getting rid of all of the equipment.
00:22:26.262 --> 00:22:27.362
You do it all yourself.
00:22:27.362 --> 00:22:28.262
You run a small business.
00:22:28.262 --> 00:22:29.022
There's no help.
00:22:29.342 --> 00:22:31.062
There's no help whatsoever.
00:22:31.062 --> 00:22:39.582
So literally you spend a month making people redundant, doing all those things, getting rid of offices, ending leases, cleaning offices.
00:22:39.822 --> 00:22:42.562
It's a very weird and wonderful thing.
00:22:42.862 --> 00:22:46.182
The plus side was, baby Marina, as you know, I'm only 26.
00:22:46.722 --> 00:22:49.522
So I'm lucky enough that...
00:22:49.522 --> 00:22:52.802
So Flora and I met very late and then we couldn't have children.
00:22:52.802 --> 00:22:58.362
And through the miracle of IVF, we eventually managed to have children after about a 10 year journey.
00:22:58.362 --> 00:23:01.262
And so Kit, my eldest boy, is nearly four.
00:23:01.262 --> 00:23:07.942
And then we decided shortly before the general election in 24, we said, okay, should we try one more time?
00:23:07.942 --> 00:23:09.802
Because we'd had a lot of failures.
00:23:10.962 --> 00:23:14.082
And I said, look, she's about to lose her job.
00:23:15.242 --> 00:23:18.042
I was probably going to lose my job.
00:23:18.042 --> 00:23:18.962
I'm not wealthy.
00:23:18.962 --> 00:23:20.662
I've done 15 years of public service.
00:23:20.662 --> 00:23:25.822
And contrary to everyone's belief that politicians do it for the money, that isn't what you do it for.
00:23:25.822 --> 00:23:28.022
And so we then said, yes, we will.
00:23:28.022 --> 00:23:30.942
And baby Marina popped out a month after the general election.
00:23:30.942 --> 00:23:38.122
And that was an amazing thing, actually, and a very special way of easing your way into a new life.
00:23:38.122 --> 00:23:42.842
And I've been lucky enough to pick up a couple of jobs as advisors to various people.
00:23:43.162 --> 00:23:46.602
I'm doing some really interesting international work in the Middle East.
00:23:46.602 --> 00:23:56.782
And that is fascinating, helping some Middle East countries who are a bit complicated at the moment, try and find their way into retirement systems that are modern.
00:23:56.782 --> 00:23:59.182
And it's been a joy, frankly.
00:23:59.182 --> 00:24:06.102
I'm not quite sure what the future holds, but at the moment, I'm trying very hard to be a really good parent to two small children.
00:24:06.102 --> 00:24:10.782
I got them both up this morning, delivered them both to nursery and have...
00:24:10.802 --> 00:24:11.622
Impressive.
00:24:11.622 --> 00:24:12.842
You're here in London.
00:24:12.842 --> 00:24:18.882
And I'm then, yeah, it's a long story, but I genuinely have done really good stuff.
00:24:18.882 --> 00:24:20.582
It's really interesting.
00:24:20.582 --> 00:24:21.122
Brilliant.
00:24:21.122 --> 00:24:25.002
So I've spotted you popping up all over the world in LinkedIn.
00:24:25.002 --> 00:24:30.662
You've mentioned the Middle East, you've been in Australia, Ireland, you were in Cape Town last week.
00:24:30.662 --> 00:24:38.122
What is your view when you're looking back at the UK pension system from all those other different models?
00:24:38.122 --> 00:24:41.082
So I think we're hard on ourselves.
00:24:41.082 --> 00:24:44.862
You and I go to lots of conferences and everyone's a bit sort of glass half full.
00:24:44.862 --> 00:24:45.102
Yeah.
00:24:45.582 --> 00:24:46.402
Half empty.
00:24:46.402 --> 00:24:46.782
Yeah.
00:24:46.782 --> 00:24:48.642
Well, half empty, frankly.
00:24:50.102 --> 00:24:53.142
Half empty, I should have said rather, or totally empty.
00:24:53.142 --> 00:24:56.402
So we do certain things really well.
00:24:56.402 --> 00:24:59.102
We have an evolving DB with a good pathway.
00:24:59.102 --> 00:25:01.962
The LGPS needs work, but it's doing okay.
00:25:02.502 --> 00:25:06.702
And in DC, we should be really proud of the DC Master Trust world we created.
00:25:06.702 --> 00:25:08.562
You know, it is a success story.
00:25:08.562 --> 00:25:15.082
We have a stroppy 13-year-old is the best description I can give it, because it's created in 2012.
00:25:15.082 --> 00:25:17.262
It's 13 and a half years of age.
00:25:17.262 --> 00:25:19.242
It's not fully formed, right?
00:25:19.242 --> 00:25:26.522
But if you look at the Australians created in 1992, they've got a fully formed 33-year-old DC system, and it is one of the envies of the world.
00:25:26.522 --> 00:25:28.042
We're 20 years away from that.
00:25:28.042 --> 00:25:31.902
And it will be incredible to see the progression of how that goes.
00:25:32.542 --> 00:25:35.962
And we've got much to be very, very proud of.
00:25:35.962 --> 00:25:39.222
I also, listen, I spent three weeks in Australia in November.
00:25:39.222 --> 00:25:43.562
And they are the kings of accumulation, but they are useless at de-cumulation.
00:25:43.562 --> 00:25:46.782
You know, I said to them, well, obviously you have wake-up packs.
00:25:46.782 --> 00:25:48.802
And they went, what's a wake-up pack?
00:25:48.802 --> 00:25:49.322
Genuinely.
00:25:49.322 --> 00:25:51.542
So they have no contact with the member.
00:25:51.542 --> 00:26:00.822
I mean, your app would do well, because they have no contact with the member pretty much between acquisition and, frankly, a week or a month before retirement.
00:26:00.822 --> 00:26:02.722
There is, I mean, there's a few touch points.
00:26:02.722 --> 00:26:03.942
I met someone at Pensions UK.
00:26:03.942 --> 00:26:05.502
I think you sent them over to see us.
00:26:05.502 --> 00:26:07.422
And yeah, exactly what you're saying.
00:26:07.422 --> 00:26:09.082
They're like, well, we don't have anything like this.
00:26:09.082 --> 00:26:10.262
Pensions mirror.
00:26:10.262 --> 00:26:10.962
This is amazing.
00:26:11.502 --> 00:26:11.942
All this.
00:26:11.942 --> 00:26:13.662
They are so far behind.
00:26:13.662 --> 00:26:18.642
And it's astonishing when we beat ourselves up with quality of advice and guidance.
00:26:18.642 --> 00:26:21.762
We beat ourselves up for targeted support.
00:26:21.762 --> 00:26:33.862
Most countries would give their ITs for the problem that we have that we're trying to navigate advice guidance, that we have the quality of the apps amongst various providers, that we're actually developing a dashboard, albeit late, albeit slow.
00:26:33.862 --> 00:26:45.942
But we're actually on the dashboard journey, which the dashboard is going to be the biggest all singing, all dancing dashboard anyone's ever seen given it's doing state, DB, DC, private, everything.
00:26:45.942 --> 00:26:47.862
It's going to be enormous and it's going to be very good.
00:26:47.862 --> 00:26:50.122
So I think it's a lot better.
00:26:50.122 --> 00:26:55.422
There are a few things that I would say we are deficient on.
00:26:55.422 --> 00:26:58.822
Going back to our savings piece, we're just still a nation without savings.
00:26:58.822 --> 00:27:01.682
That's not a good situation to be in.
00:27:01.682 --> 00:27:05.002
I think people don't understand what they've got.
00:27:05.002 --> 00:27:15.122
So if I go into the tap and smile pub in the centre of Hexham, in reality, and I said to everyone, who here has got an auto enrolled DC pension and do they know what it is?
00:27:15.142 --> 00:27:17.462
One in a hundred might know what that is.
00:27:17.462 --> 00:27:22.422
Now, that's got to change over the next few years, but the Australian example shows that that is what happens.
00:27:24.262 --> 00:27:28.742
I would love it that we could rename auto enrolled DC pensions to something like a super.
00:27:28.742 --> 00:27:30.362
Yeah.
00:27:30.362 --> 00:27:35.002
Does it happen in Australia, though, because they're happier talking about money than we are here?
00:27:35.002 --> 00:27:35.602
No.
00:27:35.782 --> 00:27:49.082
There's loads of evidence that shows that it happened in Australia when their pots became sufficiently large, that everybody went, wow, I've got a 50,000 Aussie dollar pot or 100,000 Aussie dollar pot.
00:27:49.082 --> 00:27:49.962
What am I going to do with it?
00:27:50.382 --> 00:27:57.682
And by the way, the individual supers in Australia do amazing comms, really amazing comms and public comms.
00:27:57.682 --> 00:28:05.062
So they, you know, it's not just we would like to invest with Scottish Widows or Aviva or LNG or whatever.
00:28:05.062 --> 00:28:10.162
It's proper engagement with the member in public, in a public space.
00:28:10.162 --> 00:28:13.782
Less about the day-to-day thing.
00:28:13.782 --> 00:28:20.462
But for example, if they do private assets, for example, nurses' housing is the best example.
00:28:20.462 --> 00:28:25.282
I saw it advertised that your pension is making these key worker houses.
00:28:26.102 --> 00:28:27.662
That sort of stuff, they do very well.
00:28:27.662 --> 00:28:29.542
Also, they're 20 years older than us.
00:28:29.542 --> 00:28:33.582
We will change the way we do this when we get Dashboard, when we get other things.
00:28:33.782 --> 00:28:45.662
It will still be interesting to see if the British public are comfortable talking about their money in the way that the Australians are about signing around at the barbecue, chatting about how much is in their supers.
00:28:48.262 --> 00:28:48.862
We'll wait and see.
00:28:49.162 --> 00:28:50.542
It might be a kind of thing that does develop.
00:28:50.542 --> 00:28:54.122
We don't do as many barbecues as well, because it's always raining.
00:28:54.122 --> 00:28:56.142
True.
00:28:56.142 --> 00:29:01.702
Okay, so that's kind of, looking back, it's like we're not as bad as...
00:29:01.702 --> 00:29:04.682
No, I think we are better than we give ourselves credit for.
00:29:04.682 --> 00:29:11.562
We've got a model in Australia for accumulation, but we need to be fixing the retirement space.
00:29:11.562 --> 00:29:14.202
And it's something that we are doing right now.
00:29:14.402 --> 00:29:16.062
So there's loads of focus on retirement right now.
00:29:16.062 --> 00:29:16.582
There really is.
00:29:16.762 --> 00:29:27.422
And when I started that, I remember doing the consultation on de-cumulation, and Nick Sherry, who is my opposite number in Australia, said, you are doing this nearly 18 years earlier than we started.
00:29:27.422 --> 00:29:31.462
They only started a de-cumulation consultation on year 30.
00:29:31.462 --> 00:29:35.022
And we were starting it on year 8, year 9.
00:29:35.022 --> 00:29:37.602
We're miles ahead, miles ahead.
00:29:37.602 --> 00:29:41.802
Okay, so we're looking forward to 2030 on this.
00:29:43.322 --> 00:29:48.542
Today, you're talking at the event later on, your vision of 2030.
00:29:48.542 --> 00:29:53.642
So what I thought I'd do is give you some quickfire questions about 2030.
00:29:53.642 --> 00:29:55.242
It's only four years away.
00:29:55.242 --> 00:30:01.122
At Scotchwood, as we've been calling this decade, the connected 20s, the decade when all your finances become connected together.
00:30:02.782 --> 00:30:04.742
We created that right at the beginning of the decade.
00:30:04.802 --> 00:30:12.502
And six years in, it's probably not as far down the line as I would have expected us to be by this stage, but that's just the way it is.
00:30:12.502 --> 00:30:16.042
So let me go for some questions around some of these things.
00:30:16.042 --> 00:30:21.682
So first and foremost, 2030, will Dashboards be live and will they be game changing?
00:30:21.682 --> 00:30:22.722
Yes and yes.
00:30:22.722 --> 00:30:24.222
I'm very hopeful.
00:30:24.222 --> 00:30:26.682
I'll believe it when I see it, but yes and yes.
00:30:26.702 --> 00:30:28.962
Okay, that's positive.
00:30:28.962 --> 00:30:30.142
What about VFM?
00:30:30.142 --> 00:30:33.262
Do you think that will have changed things for members?
00:30:33.262 --> 00:30:33.822
Yes, I do.
00:30:34.542 --> 00:30:39.802
Clearly, the present draft is not the right draft, in my humble opinion.
00:30:39.802 --> 00:30:46.642
But anything that drives forward a focus on net performance is, in my view, a good thing.
00:30:46.642 --> 00:30:56.142
You will be aware that there are some companies over the last five to 10 years, I'm not going to name names, who have dramatically underperformed.
00:30:56.142 --> 00:30:59.202
And I, as a minister, could do nothing about that.
00:30:59.202 --> 00:31:02.862
Now, in Australia, I, as a minister, could close them down.
00:31:03.142 --> 00:31:07.282
I could move them to a better performing organization.
00:31:07.282 --> 00:31:09.302
And that is a good thing.
00:31:09.302 --> 00:31:19.782
It is the ability of government and regulators to step in and say, you are being grossly unlooked after, badly looked after by your provider.
00:31:19.782 --> 00:31:21.802
And by the way, this should also apply across the board.
00:31:21.802 --> 00:31:25.502
It shouldn't just be DC, it should be DB and LGPS.
00:31:25.502 --> 00:31:28.162
There are some LGPS that have performed terribly, for example.
00:31:28.822 --> 00:31:38.522
I genuinely feel getting a real understanding of performance and then rewarding managers and rewarding providers who do well is a great thing.
00:31:38.522 --> 00:31:41.182
Now, is the devil's in the detail?
00:31:41.182 --> 00:31:44.062
I know people get, oh, well, you can't judge us on this.
00:31:44.062 --> 00:31:49.102
Trust me, other countries, as you know, Australia have been doing net performance for a long period of time.
00:31:49.102 --> 00:31:54.182
Other countries are able to judge DC and DB providers on a long-term basis.
00:31:54.182 --> 00:31:55.762
There's no reason why we can't do it here.
00:31:56.062 --> 00:31:58.542
Yeah, and I think that's the crucial bit of the long-term basis.
00:31:58.542 --> 00:32:06.702
It kind of gets caught up in this idea that if you have a bad one-year performance, you're going to be shut down.
00:32:06.702 --> 00:32:14.802
Well, listen, I think you can do it on a one, three, five, 10-year basis and you can try and do some forward-looking metrics, very hard to do.
00:32:14.802 --> 00:32:19.022
But other countries do this really easily.
00:32:19.022 --> 00:32:27.602
And there are ratings companies, Super Ratings is one, other companies are out there, who will give you this today, quite frankly.
00:32:27.602 --> 00:32:32.522
And my slight nudge to the industry will be, why aren't you doing this now?
00:32:32.522 --> 00:32:36.262
Why don't you just, if you're so good, as you say you are, publish it.
00:32:36.262 --> 00:32:37.402
Publish all your data now.
00:32:37.402 --> 00:32:46.182
Just say, look, this is what we are, because most of our members in most schemes don't understand the performance metrics of that scheme.
00:32:46.182 --> 00:32:47.962
They really don't, in my opinion.
00:32:47.962 --> 00:32:52.222
Well, later on today, I'll show you in the app how we do that and see if you think that can.
00:32:52.322 --> 00:32:52.922
Yeah, good, good.
00:32:52.922 --> 00:32:53.602
I look forward to it.
00:32:53.702 --> 00:32:55.742
We won't be doing an addendum, but...
00:32:55.742 --> 00:32:56.302
It's OK.
00:32:56.302 --> 00:32:56.862
It's OK.
00:32:56.862 --> 00:32:58.342
Yeah, brilliant.
00:32:58.342 --> 00:33:01.722
OK, 2030, any changes to adequacy?
00:33:01.722 --> 00:33:02.822
Sadly, no.
00:33:02.822 --> 00:33:06.082
You might have a road map and one would hope you have a road map.
00:33:06.082 --> 00:33:12.742
My personal view is the any increase will be on the 2nd of May, 2033.
00:33:12.742 --> 00:33:16.802
The reason being is the next general election is on the 1st of May in 2029.
00:33:16.802 --> 00:33:20.042
There's no way that Labour are going to not go very, very long.
00:33:20.522 --> 00:33:24.902
Four years after that is the 1st of May, 2033.
00:33:24.902 --> 00:33:33.682
So you'd implement the change on the 2nd of May, so that politically you don't need to worry about the implementation, because that has consequences of treasuries and things like that.
00:33:33.682 --> 00:33:37.322
But at the same stage, you at least have a road map that you pass the legislation.
00:33:37.322 --> 00:33:38.962
That's the key thing.
00:33:38.962 --> 00:33:40.382
Okay.
00:33:40.382 --> 00:33:46.042
But you won't get an increase above 8% before 2030, in my view.
00:33:46.102 --> 00:33:46.922
Okay.
00:33:46.922 --> 00:33:47.342
Yeah.
00:33:47.342 --> 00:33:50.702
I mean, there doesn't seem to be much noise suggesting that we will, so.
00:33:50.702 --> 00:34:01.322
My worry is, for example, the pension commission doesn't report back, and then the Labour government doesn't respond to it, and we're suddenly into a general election, and then we are properly long grass.
00:34:01.322 --> 00:34:01.722
Yeah.
00:34:01.722 --> 00:34:05.122
So my next question was about pension commission.
00:34:05.122 --> 00:34:07.342
Do you think, what do you think will come out of that?
00:34:07.342 --> 00:34:07.922
It's a good thing.
00:34:07.922 --> 00:34:08.862
Listen, it's a good thing.
00:34:08.862 --> 00:34:10.302
I know Jeannie Drake and others.
00:34:10.302 --> 00:34:26.362
I think I tried to persuade the Labour government to make it cross party, put a bunch of other political parties on it, because the problem is, if it's one political party proposing one scenario, it becomes a political football.
00:34:26.362 --> 00:34:28.342
And that is not a good thing.
00:34:28.342 --> 00:34:30.002
They have chosen not to do that.
00:34:30.002 --> 00:34:31.042
I know Jeannie well.
00:34:31.042 --> 00:34:33.262
She's a very competent lady.
00:34:33.262 --> 00:34:37.102
And she's clearly, you know, she's in the original Turner Commission.
00:34:37.102 --> 00:34:43.962
But at the same stage, I will believe the outcomes being implemented when I see it.
00:34:43.962 --> 00:34:46.042
Yeah, not by 2030.
00:34:46.182 --> 00:34:47.422
I don't see it personally.
00:34:47.422 --> 00:34:48.662
I know Treasury too well.
00:34:48.662 --> 00:34:50.322
I'd love to be proven wrong.
00:34:50.322 --> 00:34:55.822
But Treasury have proven to me on a repeat basis that they block stuff.
00:34:55.822 --> 00:34:56.882
Under successive governments.
00:34:56.882 --> 00:35:00.862
It's not just this government, but they'll do it under this government for sure.
00:35:00.862 --> 00:35:05.162
And more about AI in the world of workplace savings.
00:35:05.162 --> 00:35:06.202
What kind of disruption?
00:35:06.282 --> 00:35:07.222
What do you think?
00:35:07.222 --> 00:35:10.022
What impact will it be having by 2030?
00:35:10.022 --> 00:35:10.722
I think a lot.
00:35:11.302 --> 00:35:12.622
A genuinely large amount.
00:35:12.622 --> 00:35:26.662
You know, there is no question that AI and is going to transform the way you get managed, sort of nudged advice and scenario planning basically.
00:35:26.662 --> 00:35:28.482
And that is it's already happening.
00:35:28.482 --> 00:35:36.222
We can see that all the all companies are creating AI bots to try and navigate you through the particular processes.
00:35:36.222 --> 00:35:40.402
I also think there is a massive swathe of jobs that are going to disappear.
00:35:42.242 --> 00:35:56.542
And I also think you're going to get AI taking over things like investment strategies and in a way that we, at the moment we pay very nice people very good money to do analysis and things like that.
00:35:56.542 --> 00:36:05.862
I asked one of the particular providers, co-pilots to do me a paper and it did me a paper in like five minutes.
00:36:05.862 --> 00:36:11.042
And I thought, wow, this is, and it would probably take me a day or two to write said paper.
00:36:11.042 --> 00:36:16.662
Now, I then had to play around with it and prove it, but the way that code is developing is astonishing.
00:36:16.662 --> 00:36:17.182
Yeah.
00:36:17.182 --> 00:36:18.042
Yeah.
00:36:18.042 --> 00:36:20.742
I don't think we'd disagree with much of that.
00:36:22.022 --> 00:36:29.642
And to kind of finish us off, what one thing do you think employers could do to really help the workforce retire better?
00:36:29.642 --> 00:36:37.562
So, I'm a massive fan of additional provision by an employer, and I've got good examples of this.
00:36:37.562 --> 00:36:41.302
So, obviously, you've got the bog standard 8%, okay?
00:36:41.302 --> 00:36:44.082
Now, some employers choose to auto-escalate.
00:36:44.082 --> 00:36:50.362
So, FTSE 100 employers tend to say, we like you so much, we're going to give you another 5 or 10%, right?
00:36:50.622 --> 00:36:56.222
I actually, even though I'm the former pensions minister, and I'm a big fan of pensions, I don't think they should do that.
00:36:56.222 --> 00:37:07.782
What I'd like them to be doing is I'd like to be re-offering their employees, first of all, rainy day savings, give them a 1% rainy day savings is a bog standard thing that every young employee should have in my view.
00:37:07.782 --> 00:37:18.182
The second would be things like housing deposit funds, and it's transformational in terms of productivity, stickability of employees.
00:37:18.182 --> 00:37:29.782
And I also feel that if you want pensions to have long-term resonance for Gen Z and beyond, you have to address the fact that most of them can't afford a house.
00:37:29.782 --> 00:37:30.722
Right?
00:37:30.722 --> 00:37:33.742
And pensions are deferred earnings, right?
00:37:33.922 --> 00:37:43.302
And if they genuinely have to feel there's no prospect of getting a flat or accommodation, why would they then engage with deferred earnings into a pension?
00:37:43.302 --> 00:37:50.842
So to protect pensions, bizarrely, I think you should be taking some money and investing it in housing deposit funds and things like that.
00:37:50.842 --> 00:38:00.282
Helping them on a journey, and I feel that if providers and employers did that, it would improve the outcomes on pensions.
00:38:00.282 --> 00:38:02.462
Less people would drop out, that's my big concern.
00:38:03.002 --> 00:38:08.242
And more particularly, you would genuinely transform productivity and retention of the employees.
00:38:08.242 --> 00:38:15.962
You think that's a more effective way than allowing people to take money out of their pension for their first house?
00:38:15.962 --> 00:38:23.242
So I was asked to look at this by Lloyd's, but a few years ago, and got into trouble with the FT, and Joe Cumbo has always had a pop at me.
00:38:25.002 --> 00:38:26.482
And plus ça change there.
00:38:26.482 --> 00:38:36.762
But the practical reality is, if there is a sufficient amount of money in the pot, I see no reason why you can't do that.
00:38:36.762 --> 00:38:38.162
So it's really simple.
00:38:38.422 --> 00:38:42.662
I give my money to an asset manager to invest in a balanced portfolio.
00:38:42.662 --> 00:38:44.242
He invests in property.
00:38:44.242 --> 00:38:49.862
But I personally am not considered a safe enough bet that I can invest in property with my pension.
00:38:49.862 --> 00:38:55.282
Now, I find that slightly illogical, given the amount of money I'm already paying for rent and things like that.
00:38:55.282 --> 00:38:59.522
So I genuinely think that we can find a way on this.
00:38:59.522 --> 00:39:05.002
And I'm helping in a very small way the South Africans who've created a two pot system.
00:39:05.002 --> 00:39:15.322
And you are able in South Africa to extract some money in certain circumstances, hence why it's called a two pot system, to do other things with it or from your pension.
00:39:15.382 --> 00:39:23.682
And the evidence there, early days, it's only been going a year or so, is that people are extracting some money to do things like housing deposits.
00:39:23.682 --> 00:39:24.102
Okay.
00:39:24.102 --> 00:39:25.062
Fascinating.
00:39:25.062 --> 00:39:27.542
Okay, Guy, it's been brilliant having you on today.
00:39:27.542 --> 00:39:35.942
You've played such a big role in recent pensions landscape, love that you've been so grounded and so invested in trying to help people to do better.
00:39:36.062 --> 00:39:37.822
And also to claim what they're entitled to actually.
00:39:37.822 --> 00:39:39.862
We didn't talk about pension credits today.
00:39:39.862 --> 00:39:43.682
That's another thing that you championed as well, even TV adverts, wasn't it?
00:39:43.922 --> 00:39:50.082
The amazing Len Goodman and I did a fantastic version of Strictly Come Dancing.
00:39:50.082 --> 00:39:51.402
I remember it.
00:39:51.402 --> 00:39:56.942
And yeah, pension credit and various other beneficial entitlements were something I was very big on.
00:39:56.942 --> 00:39:57.382
Yeah.
00:39:57.382 --> 00:40:02.342
And you actually created a pension engagement season as well?
00:40:02.342 --> 00:40:08.922
Probably the best legacy was trying to drive a bunch of providers to really, really get involved in this.
00:40:08.922 --> 00:40:11.182
Personally, I think it should be even bigger than it is already.
00:40:11.882 --> 00:40:21.822
And I had this pretty much, as always with the pension industry, I had to threaten them that I was going to do it and force them to do it before they all then went, yes, okay, we'll do it anyway.
00:40:21.822 --> 00:40:22.022
Yeah.
00:40:22.022 --> 00:40:23.262
It's a really cool thing they're doing.
00:40:23.262 --> 00:40:24.402
No, it's good.
00:40:24.402 --> 00:40:27.182
It's really great to be part of that.
00:40:27.182 --> 00:40:29.702
So a lot of great stuff to look back on.
00:40:29.702 --> 00:40:36.942
I mean, it's clear that you're still really engaged in adding value in the global pension ecosystem now that you've upped from just the UK.
00:40:36.942 --> 00:40:39.722
So thanks so much for taking time to join us today.
00:40:40.302 --> 00:40:41.722
I hope you've enjoyed it too.
00:40:41.722 --> 00:40:42.282
I have indeed.
00:40:42.282 --> 00:40:43.242
Thanks for having me on.
00:40:43.242 --> 00:40:43.582
Brilliant.
00:40:43.582 --> 00:40:44.822
Thank you so much, Guy.
00:40:44.822 --> 00:40:47.022
It just remains for me to thank everyone for listening today.
00:40:47.022 --> 00:40:51.982
We don't have Pensions Royalty on every podcast, but there's loads of great content.
00:40:51.982 --> 00:40:55.282
So if you've enjoyed this session, it would be great to have you as a regular listener.
00:40:55.282 --> 00:40:56.382
So please subscribe.
00:40:56.382 --> 00:40:57.342
Loads more coming soon.
00:40:57.342 --> 00:40:59.622
But for now, thanks to you all.
00:40:59.622 --> 00:41:00.402
Until next time.
00:00:13.262 --> 00:00:17.782
Hi, everyone, and welcome to this exciting episode of the Scottish Widows Workplace Pension Podcast.
00:00:17.782 --> 00:00:29.622
And today we are joined by Pension Royalty, the longest serving pension minister in recent UK political history, having just over five years in role, and a good friend of mine, so I'm delighted to have him on today.
00:00:29.622 --> 00:00:32.522
Welcome to the podcast, the one and only Guy Opperman.
00:00:32.522 --> 00:00:33.762
Wow, what an intro.
00:00:33.762 --> 00:00:38.402
It's a bit like listening to the Queen meets your mum meets some sort of fan base.
00:00:38.402 --> 00:00:39.542
Thank you very much for having me on.
00:00:39.542 --> 00:00:40.462
It's a delight to be here.
00:00:40.742 --> 00:00:44.022
Well, the intro is going to get even worse because I'm going to get AI to do it.
00:00:44.022 --> 00:00:46.862
So let me first of all get the official bit out of the way.
00:00:46.862 --> 00:00:49.942
Today's podcast is aimed at those interested in UK pensions.
00:00:49.942 --> 00:00:55.162
I'll be packed full of pension goodies, but we will contain no financial advice.
00:00:55.162 --> 00:01:00.082
Now, Guy, many of our listeners will know who you are, but we do get lessons from all over the world.
00:01:00.082 --> 00:01:06.422
So I've got my AI buddy to do 150 word bio in a chatty pod intro fashion.
00:01:06.422 --> 00:01:07.382
So let's go.
00:01:07.382 --> 00:01:14.962
If you want to understand how UK pensions really work and why they work the way they do, today's guest has been right at the centre of it.
00:01:14.962 --> 00:01:27.242
Guy Opperman spent more than five years as UK Pensions Minister, making him the longest serving Pensions Minister in modern history, a rare bit of continuity in a role known for constant change.
00:01:27.242 --> 00:01:30.242
During his time in office, Guy didn't just keep the seat warm.
00:01:30.242 --> 00:01:31.582
You'll be glad it says that.
00:01:31.582 --> 00:01:38.362
He drove through Pensions Schemes Act, pushed the long-awaited Pensions Dashboards from idea to reality.
00:01:38.362 --> 00:01:39.062
More on that later.
00:01:39.582 --> 00:01:51.122
He laid the groundwork for collective defined contribution schemes, expanded auto enrolment and toughened up the system against pension scams, all while championing financial inclusion and better outcome for savers.
00:01:51.122 --> 00:01:57.462
Before politics, he was a criminal barrister, and since leaving Parliament, he stayed deeply engaged with pensions industry.
00:01:57.462 --> 00:02:05.902
Known for his energy, policy depth and hands-on approach, Guy remains a powerful voice in the future of retirement saving.
00:02:05.902 --> 00:02:09.382
Well, Guy, with five years in role, that's a lot to squeeze in to 150 words.
00:02:09.382 --> 00:02:10.622
How was that?
00:02:10.622 --> 00:02:12.122
I love ChatGPT.
00:02:12.622 --> 00:02:19.862
That was amazing and even more of a eulogy, frankly, than your original intro.
00:02:19.862 --> 00:02:20.822
So I'm loving it.
00:02:20.822 --> 00:02:21.422
Keep going.
00:02:21.422 --> 00:02:23.102
Well, just to be fair, that was co-pilot.
00:02:23.662 --> 00:02:24.462
Sorry, co-pilot.
00:02:24.462 --> 00:02:26.422
There are other providers out there, aren't there?
00:02:26.422 --> 00:02:27.682
Just to keep it right.
00:02:27.682 --> 00:02:34.322
So we're here at a Scottish Widows event today with some of our employer clients to share your thoughts on Pension Vision 2030.
00:02:34.962 --> 00:02:37.742
What will the pension landscape look like at the end of the decade?
00:02:37.742 --> 00:02:40.042
But I'd like to start off by looking back.
00:02:40.042 --> 00:02:43.442
So co-pilot has pulled out a few key deliverables from your time in office.
00:02:43.442 --> 00:02:45.462
So let's just take a run through them.
00:02:45.462 --> 00:02:50.602
Give us your summary and score of how well they have landed or are delivering.
00:02:50.602 --> 00:02:51.702
So let's go.
00:02:51.702 --> 00:02:53.762
Number one, Pension Schemes Act.
00:02:53.762 --> 00:02:55.082
Pretty good.
00:02:55.082 --> 00:02:59.862
Created Dashboards, created CDCs, reformed DB.
00:02:59.862 --> 00:03:02.162
Obviously, those first two are works in progress.
00:03:02.982 --> 00:03:05.022
But without the act, nothing happens.
00:03:05.022 --> 00:03:06.062
Okay.
00:03:06.062 --> 00:03:08.622
So my next two are the two you mentioned there.
00:03:08.622 --> 00:03:09.902
So Pensions Dashboards.
00:03:09.902 --> 00:03:10.462
Where are we?
00:03:10.462 --> 00:03:20.462
So on its own, listen, the old Chinese philosopher says, the longest journey starts with the first step or the thousand-mile journey starts with the first step.
00:03:20.462 --> 00:03:21.942
I think that's LaoZhou.
00:03:23.002 --> 00:03:25.262
But it's going too slowly, bluntly.
00:03:25.682 --> 00:03:30.182
I love and adore Chris Curry and other people at the Dashboard team.
00:03:30.902 --> 00:03:38.102
But obviously, the old joke that we both say is I hired him on a two-year contract six and a half years ago, and we still haven't delivered anything.
00:03:38.102 --> 00:03:45.102
And I just am saddened that we are not doing commercial dashboards because to my view, that is very, very important as well.
00:03:45.102 --> 00:03:45.502
Okay.
00:03:45.502 --> 00:03:53.282
Well, as it happens today, we will also be recording a live event with Chris Curry in front of our employer client.
00:03:53.282 --> 00:03:56.962
So we'll get the questions from the floor and we'll find out from Chris exactly where we are.
00:03:56.962 --> 00:03:59.002
That will be alongside this podcast.
00:04:00.062 --> 00:04:02.142
CDC?
00:04:02.142 --> 00:04:03.522
A work in progress again.
00:04:04.722 --> 00:04:13.562
I tell a good story, I think, about traditionally I would go to CDC events at PLSA and all various events and no one would come.
00:04:13.562 --> 00:04:17.002
There'd be three men and a dog and the dog was in the wrong place, right?
00:04:17.002 --> 00:04:19.582
And now it's changed though.
00:04:19.582 --> 00:04:26.542
As multi-employer comes to the fore, there are a lot of multi-employers and single employers who are now looking at this.
00:04:26.722 --> 00:04:30.462
Now, it's a long way to go, don't get me wrong.
00:04:30.462 --> 00:04:38.522
And if we're talking up to 2030, then that's the sort of timeframe I think is realistic for CDC to possibly come into existence.
00:04:38.522 --> 00:04:46.282
But genuinely having an alternative third way to DC and DB is, in my view, a good thing.
00:04:46.282 --> 00:04:51.382
And for some employers, particularly, I think union backed employers, I think it's a really, really good thing.
00:04:51.382 --> 00:04:54.162
And I've seen and lived through the Royal Mail experience.
00:04:54.162 --> 00:04:55.102
It's a fantastic deal.
00:04:55.562 --> 00:04:55.902
Yeah.
00:04:55.902 --> 00:04:57.542
Okay.
00:04:57.542 --> 00:04:58.742
Yeah.
00:04:58.742 --> 00:04:58.882
Yeah.
00:04:59.382 --> 00:05:02.142
There's definitely a lot of talk about it.
00:05:03.602 --> 00:05:08.442
There's a lot of talk about different figures, about how much extra income you get and all that kind of stuff.
00:05:08.442 --> 00:05:10.222
I don't know if that clouds the water a little bit.
00:05:10.222 --> 00:05:11.122
I think it does a bit.
00:05:11.122 --> 00:05:14.682
And I think to say, oh, you're going to get 60% more, 50% more.
00:05:14.682 --> 00:05:16.882
That's a stupid way of doing it, in my humble opinion.
00:05:17.182 --> 00:05:21.242
I get how departments like to spin stuff.
00:05:21.242 --> 00:05:23.182
I'm not so naïve as to not understand that.
00:05:23.862 --> 00:05:31.402
But it's a wrong way to say, you're going to guarantee better situation, because that's just not the nature of the beast.
00:05:31.402 --> 00:05:36.942
What I do think is, you will get a better situation than a pure DC, if it's properly run, basically.
00:05:36.942 --> 00:05:44.682
Now, but obviously, there's a lot of ifs and buts that go as part of a CDC, and you've got to be a different, it's a different beast, basically.
00:05:44.682 --> 00:05:45.602
Yeah.
00:05:45.602 --> 00:05:45.842
Yeah.
00:05:45.842 --> 00:05:46.242
So cool.
00:05:46.242 --> 00:05:50.302
So by 2030, I think we might have a better feel for what's available.
00:05:50.302 --> 00:05:52.582
You'll have a lot more CDCs in that space.
00:05:52.702 --> 00:05:58.542
And if you don't, the answer is, it has not then progressed and various employers have looked at it and said, no, thank you.
00:05:58.542 --> 00:05:59.262
Yeah.
00:06:00.442 --> 00:06:02.982
Expanding auto enrolment.
00:06:02.982 --> 00:06:04.142
It's not going to happen now, hurry.
00:06:04.362 --> 00:06:06.022
I welcome the pension commission.
00:06:06.022 --> 00:06:07.582
The problem is always Treasury.
00:06:07.582 --> 00:06:18.622
And the problem is Treasury will struggle to authorise greater burdens on employers leading up to a general election or post a general election.
00:06:18.622 --> 00:06:24.282
And given the whatever your views on politics, and I'm out of politics now, I stress.
00:06:24.282 --> 00:06:28.062
And I think the Labour government had done a good job in the world of pensions, by and large.
00:06:28.062 --> 00:06:36.502
But the difficulty is by raising NI, by doing the Employment Rights Act, they have put a lot more burdens and other taxes on to employers.
00:06:36.502 --> 00:06:40.642
And if you want growth, you try not to put more burdens on employers.
00:06:40.642 --> 00:06:44.602
And that is an issue, which means and I've got I've had the scars.
00:06:44.602 --> 00:06:46.622
So let's criticise my government.
00:06:46.622 --> 00:06:51.022
You know, the 2017 auto enrolment review came out in 2017.
00:06:51.342 --> 00:06:55.022
It was the first thing that landed on my desk when I became minister.
00:06:55.022 --> 00:06:57.442
And it still isn't in practice.
00:06:57.442 --> 00:07:00.502
And in fact, I don't see this government bringing it in at all.
00:07:00.502 --> 00:07:08.922
So that is a good example of a positive change to auto enrolment agreed on a cross party basis that no one's implemented.
00:07:08.922 --> 00:07:11.822
And then the private members bill was much later than that, wasn't it?
00:07:11.822 --> 00:07:15.222
I literally had to draft the private members bill myself.
00:07:15.222 --> 00:07:18.462
And obviously, I completely support everything my government does.
00:07:18.622 --> 00:07:31.442
But at the same stage, I was working behind the scenes to ensure the private members bill came into existence and was in long negotiations with Rishi, who's a friend of mine, and said, look, you have to do this without a shadow of a doubt.
00:07:31.442 --> 00:07:33.062
And finally, we got it over the line.
00:07:33.062 --> 00:07:33.722
Right.
00:07:33.722 --> 00:07:35.582
But it's not happened.
00:07:35.582 --> 00:07:36.482
You've got to implement it.
00:07:36.502 --> 00:07:40.502
So basically, that requires treasury to implement a statutory change.
00:07:40.502 --> 00:07:42.922
So it's to bring in younger people, reduce the-
00:07:42.922 --> 00:07:44.642
Go to the first pound.
00:07:44.702 --> 00:07:45.842
It would help younger people.
00:07:45.842 --> 00:07:46.562
It would help women.
00:07:46.562 --> 00:07:47.942
It would help red wall.
00:07:47.942 --> 00:07:49.582
It would help disadvantaged areas.
00:07:49.582 --> 00:07:53.262
It's a fantastically good thing, but it is a bigger burden on business.
00:07:53.262 --> 00:07:55.242
And treasury keep blocking that.
00:07:55.242 --> 00:08:00.162
And it doesn't matter which political persuasion is in government, treasury block stuff.
00:08:00.162 --> 00:08:01.782
Okay.
00:08:01.782 --> 00:08:04.502
What about toughening up on pension scams?
00:08:04.502 --> 00:08:06.022
I think we've done a pretty good job.
00:08:06.022 --> 00:08:12.362
Many would argue we've gone too far in some respects because things like transfers are really, really hard at the moment and they want to try and make that easier.
00:08:13.722 --> 00:08:16.722
I'm pleased with the way we've made progress.
00:08:16.722 --> 00:08:20.562
There is always more to be done on pension scams because scammers constantly evolve.
00:08:20.562 --> 00:08:21.342
Sure.
00:08:21.342 --> 00:08:26.462
And I wonder at times if the whole thing about it's really hard to do transfers is overdone.
00:08:26.462 --> 00:08:32.582
So I just looked at a publication today, you know, for Scottish Widows transfer out average time is 9.2 days.
00:08:32.582 --> 00:08:33.862
So that's pretty good.
00:08:33.862 --> 00:08:41.542
As far as I'm concerned is if you said to somebody, look, in two weeks time, you can get your pension out of X into Y, everyone will go, fine.
00:08:41.542 --> 00:08:43.302
I mean, unless there is a...
00:08:43.582 --> 00:08:46.142
If it's a or a go standard stuff, then it works well.
00:08:46.142 --> 00:08:49.422
And the vast bulk of it is or a go standard stuff.
00:08:49.422 --> 00:08:50.202
So indeed.
00:08:50.202 --> 00:08:50.882
Yeah.
00:08:50.882 --> 00:08:52.742
Cool.
00:08:52.742 --> 00:08:57.802
Something that was specifically on your agenda was championing financial inclusion.
00:08:57.802 --> 00:09:02.222
So rather than just being the pension minister, you're also minister for financial inclusion as well.
00:09:02.222 --> 00:09:04.942
So I love that element of the role.
00:09:04.942 --> 00:09:10.282
So I used to say I do my day job is pensions, but my night job was financial inclusion.
00:09:10.282 --> 00:09:31.742
And I loved trying to create products and capability for the masses to enjoy the financial services that we all take for granted, whether that is insurance, whether that is access to private savings, whether that is ability on credit and things like that, whether that is on credit unions and community banks, one of which I set up in Northumberland.
00:09:31.742 --> 00:09:36.722
It is a difficulty because I'm the only minister who ever done that job.
00:09:37.102 --> 00:09:39.642
There is no financial inclusion minister anymore.
00:09:39.642 --> 00:09:51.502
However, to be at their credit, the Labour government have done something that I wanted to do, and which I couldn't get through with government, which was they have said that they're going to include in primary education, financial education.
00:09:51.502 --> 00:10:02.422
Now, we managed to get into secondary, but I loved and adored projects like the Lifesavers Project that we did with Virgin Money and with the Church of England, which is putting banks in schools.
00:10:02.482 --> 00:10:16.462
Amazing, positive change, whereby you get kids on a Friday running a bank in the school, then they would go home to mum and dad, particularly in the deprived areas where we set up the banks and say, mum and daddy, do you have a savings account?
00:10:16.462 --> 00:10:19.802
Because I'm saving for Christmas, I'm saving for a rainy day.
00:10:19.802 --> 00:10:26.802
And the positive change in some of the estates where I went to see, where then the mum and dad would then get signed up for a bank account.
00:10:26.802 --> 00:10:27.782
Just amazing.
00:10:27.822 --> 00:10:28.642
Yeah.
00:10:28.642 --> 00:10:29.122
And you know what?
00:10:29.122 --> 00:10:32.182
We used to have that in Scotland in the 70s, Scottish Savings Bank.
00:10:32.182 --> 00:10:36.802
So I used to go to school with five pence and that would get put into my bank account.
00:10:36.802 --> 00:10:42.862
It remains a crime in this country that we have 11 million people who don't have a hundred pounds saved.
00:10:42.862 --> 00:10:44.682
We're a first world country.
00:10:44.682 --> 00:10:55.222
And the things that most cause you to go into bankruptcy, difficulty or disaster are your car breaking down or your washing machine breaking down because you don't have the money for the fiscal shocks that hit you.
00:10:55.222 --> 00:10:57.082
And we're not a nation of savers.
00:10:57.202 --> 00:10:58.742
That is a practical reality.
00:10:58.742 --> 00:11:00.042
We need to change that.
00:11:00.042 --> 00:11:00.862
Okay.
00:11:00.862 --> 00:11:10.182
So beyond these things that we've just discussed there, any standout moments from your time in office, things that you look back fondly on that maybe didn't make the main headlines?
00:11:10.182 --> 00:11:11.942
Trying to get super funds over the line.
00:11:11.942 --> 00:11:12.802
I love those.
00:11:12.802 --> 00:11:14.042
I think they're fantastic.
00:11:14.042 --> 00:11:16.682
And obviously this government is now taking those forward.
00:11:16.682 --> 00:11:18.462
What's your definition of super funds?
00:11:18.462 --> 00:11:20.422
It's a DB consolidator.
00:11:20.422 --> 00:11:24.362
And without a shadow of a doubt, we need them and it breaks up an insurance cartel.
00:11:25.182 --> 00:11:30.922
At the moment, the only place a DB fund can go is down the route towards an insurer.
00:11:30.922 --> 00:11:32.762
It's going to be amazing when you break that up.
00:11:32.762 --> 00:11:34.282
It's going to really improve the economy.
00:11:34.282 --> 00:11:38.902
It's going to help a whole bunch of companies and get members better outcomes.
00:11:38.902 --> 00:11:40.462
So I'm a massive fan of that.
00:11:40.642 --> 00:11:43.142
It took me ages to try and get it over the line.
00:11:43.462 --> 00:11:46.442
We're getting it into the secondary legislation at the present stage.
00:11:46.442 --> 00:11:49.142
Why will it make these changes?
00:11:49.142 --> 00:11:55.442
Because at the moment, if I want to go to a DB buyout, I have to pay 110 percent, right?
00:11:55.442 --> 00:11:59.262
So I've got to be fully funded, and I've got to give the insurers 10 percent.
00:11:59.402 --> 00:12:01.582
And that's just the premium basically.
00:12:01.582 --> 00:12:07.262
A super fund will be allowed to do things at about 105 to 106 percent, okay?
00:12:07.262 --> 00:12:25.222
Which means if you're a company who is heading to a effectively buyout or you want to go get out of your DB, of which there's about 300 and there's a pipeline of about 400, 500 billion pounds worth heading down this route, then you're in a position you've got an alternative for the first time.
00:12:25.222 --> 00:12:29.962
And that can improve outcomes for members, because insurers pretty much only invest in guilds and bonds.
00:12:29.962 --> 00:12:40.982
Secondly, you'll be in a position that the company, the corporate, will suddenly not be giving away 10 percent of its insurance DB for no benefit whatsoever.
00:12:40.982 --> 00:12:45.502
So they will then be able to reinvest in the business or really promote things in the business in a different way.
00:12:45.502 --> 00:12:53.462
It's a very important change, a massive impact upon the UK economy, and it will free up cash in a way that is not presently expected.
00:12:53.462 --> 00:12:58.662
So if you're a CFO of a business heading to a buyout, you're thinking, why on earth would I do this?
00:12:58.662 --> 00:13:02.122
I can get out and do much better, and I can then invest money in the business.
00:13:02.122 --> 00:13:09.302
I can actually grow this business, grow the UK economy, and to be fair to the Labour government, they've really seen that as a positive driver of growth.
00:13:09.302 --> 00:13:09.802
Okay, cool.
00:13:09.802 --> 00:13:15.182
I haven't seen too much talk about that in the press, so it seems to happen in maybe actual world.
00:13:15.902 --> 00:13:21.782
It's going to, 2026 to 2027, you will see significant change in this space.
00:13:21.782 --> 00:13:23.722
So that's the DB space.
00:13:23.722 --> 00:13:26.862
The things I'm also pleased about would be the consolidation.
00:13:26.862 --> 00:13:32.802
When I started, we had 87 master trusts, we're now down to what, 32, 33.
00:13:32.802 --> 00:13:37.442
LGPS were 85, they're down to six now.
00:13:37.442 --> 00:13:40.082
DB is obviously consolidating.
00:13:40.082 --> 00:13:47.502
I think with consolidation, you get better outcomes for members longer term, you run things better, you can get better rates.
00:13:47.502 --> 00:13:51.942
That's the natural progression in my view and driving that forward, I think is a good thing.
00:13:51.942 --> 00:13:56.462
I wish I'd done more on things like simpler statements and the orange letter.
00:13:56.462 --> 00:13:58.702
I wish I'd been able to really drive those things forward.
00:13:58.702 --> 00:14:03.222
Simpler statements worked for a bit, but then the machine took over and they sort of died to death.
00:14:03.222 --> 00:14:03.702
Right.
00:14:03.702 --> 00:14:12.062
Well, we'll maybe come on to that in just a minute then, because one of the things behind the headlines I'll always remember is you're coming out with me to meet a couple of employer clients.
00:14:12.642 --> 00:14:17.642
Once on a retirement vehicle, where I got one of my colleagues to give you a pension education session.
00:14:17.862 --> 00:14:29.242
I was petrified, but you were in there with the rest of the employees, listening and learning and finding out about pensions.
00:14:29.242 --> 00:14:41.502
And the second time was going out to meet Ian and Roy at Jagger Land Rover, to find out what it's actually like to run a DB and DC pension scheme, and what the effect of all these regulations were on people running schemes.
00:14:42.422 --> 00:14:44.962
And how time got allocated in businesses.
00:14:44.962 --> 00:14:46.842
So a couple of really fascinating meetings.
00:14:46.842 --> 00:14:47.942
Do you remember them?
00:14:47.942 --> 00:14:48.402
I do.
00:14:48.402 --> 00:14:50.242
And I mean, I remember those ones well.
00:14:50.242 --> 00:14:52.942
I remember going to see Jagger Land Rover.
00:14:52.942 --> 00:14:58.062
I remember the lovely young man that you had basically interviewing and educating me.
00:14:58.062 --> 00:15:00.822
I thought he did a great job, so I hope he's still with the business.
00:15:01.622 --> 00:15:03.902
He's moved on to bigger and better things.
00:15:03.902 --> 00:15:16.442
But the simple point is, I love what you and Scottish Widows have done to really change engagement and there's a massive hat tip to your good self.
00:15:16.442 --> 00:15:22.542
So we're in London Bridge filming Overlooking the Globe and City of London.
00:15:22.542 --> 00:15:31.802
And literally about 400 yards away is the Arches, where we filmed an amazing campaign at about 10 o'clock at night.
00:15:31.802 --> 00:15:35.042
And I had to say to my wife, I'm not having an affair.
00:15:35.082 --> 00:15:39.102
I'm genuinely going off at night time on, I think it was a Saturday night or something as well.
00:15:39.602 --> 00:15:40.362
Or a Sunday night.
00:15:40.362 --> 00:15:41.302
I think it might be a Sunday night.
00:15:41.302 --> 00:15:44.102
You'd been at Pilgrim's Pizzas.
00:15:44.102 --> 00:15:52.062
Just genuinely to then project stuff onto the wall about the pension, pay your pensioners some attention, all the other campaigns that we were running at the time.
00:15:52.062 --> 00:16:03.042
And I genuinely think you guys have done more for pension awareness in the wider sense of the world in a really innovative and left field way than any other firm.
00:16:03.222 --> 00:16:05.542
And great credit to you, seriously.
00:16:05.542 --> 00:16:05.982
Oh, great.
00:16:05.982 --> 00:16:08.622
And it was really fab having your support.
00:16:08.622 --> 00:16:09.842
But also we did the bus together.
00:16:09.842 --> 00:16:11.182
We did the bus.
00:16:11.262 --> 00:16:12.222
I can't remember where.
00:16:12.222 --> 00:16:14.522
Somewhere in North London, I met you.
00:16:14.522 --> 00:16:16.522
I want to say like Watford Way, something like that.
00:16:16.522 --> 00:16:22.622
It was a film utility warehouse we went to.
00:16:22.622 --> 00:16:30.122
Going to meet local businesses and just trying to educate them, enlighten them and doing things in a different way.
00:16:31.122 --> 00:16:39.962
I did feel slightly like I was part of some aging rock band on a bus driving up and going, hello Watford, it's good to be back.
00:16:39.962 --> 00:16:42.042
We are the aging pension gang.
00:16:42.042 --> 00:16:47.222
Now we're going to enlighten you and take you on places and imagine yourself in ten years time.
00:16:47.222 --> 00:16:49.702
We've got loads of Gen Z people now, so it's fine.
00:16:50.862 --> 00:16:51.962
We're just in the background.
00:16:51.962 --> 00:16:56.042
I should stress, I'm in a suit and Robert is dressed in very trendy outfit.
00:16:56.042 --> 00:16:57.282
He really is.
00:16:57.282 --> 00:17:00.462
That belies his years is my polite definition.
00:17:00.462 --> 00:17:03.982
We'll get a photo at the end and people can make their own minds up.
00:17:03.982 --> 00:17:05.342
So, so brilliant.
00:17:05.462 --> 00:17:07.302
And that was some of the highlights.
00:17:07.302 --> 00:17:12.362
But what about the final days, the end of days, the resignations, the chaos?
00:17:12.362 --> 00:17:15.942
It was absolutely mad.
00:17:15.942 --> 00:17:17.842
Give me two minutes and I'll try and tell the story.
00:17:18.002 --> 00:17:22.742
Because, so I had done the job for five years.
00:17:22.742 --> 00:17:28.842
I'd been to see Boris over the summer and had said to him, look, you have to change.
00:17:28.842 --> 00:17:30.602
He refused to change, obviously.
00:17:30.602 --> 00:17:32.582
And he said, I can't apologize, can't explain.
00:17:32.582 --> 00:17:33.602
I just don't do that.
00:17:33.602 --> 00:17:36.082
And if I do that, I'll be crucified.
00:17:36.082 --> 00:17:38.602
And I was thinking long and hard about my role.
00:17:38.602 --> 00:17:44.262
And it's a big deal to turn around to an elected Prime Minister and say, I'm sorry, I can't serve in your government.
00:17:45.202 --> 00:17:50.602
But I went to see him and I told him my concerns, and then ultimately I resigned.
00:17:52.842 --> 00:17:54.822
And I understood the consequences of that.
00:17:54.822 --> 00:17:56.622
You know, that's a very serious thing.
00:17:56.622 --> 00:17:59.762
So you see when you say went to see him, where do you go and see him?
00:17:59.762 --> 00:18:02.422
You normally go and see him in his room in the House of Commons.
00:18:02.422 --> 00:18:06.142
The Prime Minister has a room sort of just behind the Speaker's chair.
00:18:06.142 --> 00:18:07.122
There's some rooms.
00:18:07.122 --> 00:18:11.322
Prime Minister and the Chancellor and a few others have rooms there that they do meetings in.
00:18:12.042 --> 00:18:16.802
And I've met many Prime Ministers in those rooms on many occasions.
00:18:17.262 --> 00:18:19.962
It's behind the four Prime Ministers I served for.
00:18:19.962 --> 00:18:21.602
Obviously didn't serve Liz Strass.
00:18:21.602 --> 00:18:22.882
She fired me.
00:18:22.882 --> 00:18:24.042
Forty-two days sabbatical.
00:18:24.042 --> 00:18:29.782
I kindly enjoyed, courtesy of her spending a lot of time with my young children in Northumberland.
00:18:29.782 --> 00:18:31.902
So getting back to Boris.
00:18:31.902 --> 00:18:34.102
So sadly, I resigned.
00:18:34.102 --> 00:18:42.842
I went home to Northumberland and I remember going to my local pub in my village, having a pint and sitting out looking over Northumberland and then the phone goes.
00:18:42.842 --> 00:18:44.082
It's Friday night.
00:18:44.082 --> 00:18:47.022
I don't even resigned like 24 hours.
00:18:47.022 --> 00:18:56.922
And it's the chief whip who's a mate of mine, Chris Heaton Harris, going, I know you resigned, but we have a bill on Monday, on pensions and no one else knows anything about it.
00:18:56.922 --> 00:18:59.022
Would you come back and sort it out?
00:18:59.022 --> 00:19:02.242
Because by this stage, Boris had actually resigned himself.
00:19:02.242 --> 00:19:06.182
Would you come back and sort out this bill and also hold the fort for six weeks?
00:19:06.742 --> 00:19:17.742
So I was one of, I think, only two ministers who returned having resigned, held the brief for another six and a half, seven weeks, whilst the leadership election went on.
00:19:17.742 --> 00:19:25.242
Liz then fired me and then obviously Rishi took over and invited me back in.
00:19:25.242 --> 00:19:30.482
And I then, I thought long and hard, do I go back in after for Rishi?
00:19:30.482 --> 00:19:38.402
And it was obviously post COVID and he asked me to do a job of trying to get the country back to work after COVID.
00:19:38.402 --> 00:19:41.922
And kind of when a prime minister asks you to do that, you don't really turn it down.
00:19:41.922 --> 00:19:47.702
However much you realize this is a heavy lifting gig that is not easy.
00:19:47.702 --> 00:19:59.182
And also, I was really conscious that we were facing, because of Ukraine War, because of COVID, massive debt, massive inflation, really tough times.
00:19:59.182 --> 00:20:07.422
And there's a great line from Edmund Burke, which I believe in totally, which is the only thing necessary for evil to triumph is for good men and women to do nothing.
00:20:07.422 --> 00:20:08.782
So stick your hand up.
00:20:08.782 --> 00:20:12.482
If your country asks you to serve, don't go, do you know, it's a bit inconvenient.
00:20:12.482 --> 00:20:14.042
I've got young Hamley.
00:20:14.042 --> 00:20:17.062
I'm trying to keep a seat in Northumberland.
00:20:17.062 --> 00:20:19.222
Just go, yes, fine, I will sort it out.
00:20:19.222 --> 00:20:22.282
And if your prime minister asks you to serve, you don't say no, in my view.
00:20:22.282 --> 00:20:24.422
Okay, brilliant.
00:20:24.422 --> 00:20:29.262
And I guess the crucial question, do you still do the Boris Johnson thumbs up?
00:20:29.362 --> 00:20:32.142
Remember, we always had to do the double thumbs up.
00:20:32.462 --> 00:20:34.022
I'm not sure, I'm not sure I do.
00:20:34.022 --> 00:20:36.442
I'm in a different world, a different life.
00:20:36.442 --> 00:20:40.262
I'm enjoying, so I'm a, as you know, I'm a policy geek.
00:20:40.262 --> 00:20:46.522
I'm really interested in policy and how I can improve situations by policy changes.
00:20:46.522 --> 00:20:57.562
So I'm spending a lot of time helping corporates and in some cases countries, improve their retirement experience and in some cases, start from scratch, frankly.
00:20:57.562 --> 00:21:02.462
And I really am enjoying that phase of my life.
00:21:02.462 --> 00:21:14.402
I also am not working as hard as I was because if you're a minister, particularly a minister with a rural constituency 306 miles away, you are, you're doing 60 hour weeks.
00:21:14.402 --> 00:21:17.882
You know, I look at pictures of me at the end of the 2024 election.
00:21:17.882 --> 00:21:25.282
I was tired and puffy and overweight, frankly, and just, you know, really, really ground down.
00:21:25.282 --> 00:21:26.902
It's a very full on job.
00:21:26.902 --> 00:21:30.122
I'm working very hard now, but it's just a very different pressure.
00:21:30.122 --> 00:21:31.242
I have my weekends clear.
00:21:31.242 --> 00:21:36.062
And amazingly, my Twitter feed is really quite nice rather than as mad as it was.
00:21:36.062 --> 00:21:36.662
Yeah.
00:21:36.662 --> 00:21:41.822
OK, so we're kind of nicely eased into into what you're doing now.
00:21:41.822 --> 00:21:47.682
But I think we'll just have a quick pause and say, you know, it must have been great for you to have a bit more time with your family.
00:21:47.682 --> 00:21:49.662
So you've got a really young family.
00:21:51.102 --> 00:21:55.042
Tell us a little bit about how it felt to ease out of...
00:21:55.042 --> 00:22:00.122
I mean, I guess it's kind of awkward because you suddenly lose your job, right?
00:22:00.322 --> 00:22:03.302
It's a very robust and brutal process.
00:22:03.302 --> 00:22:11.422
One minute you are an elected member of parliament, you lose the election, you are given a three months severance package, which is three months salary, basically.
00:22:11.422 --> 00:22:12.402
That's it.
00:22:12.402 --> 00:22:13.542
And you're out.
00:22:13.542 --> 00:22:16.382
And you have to make all your staff redundant.
00:22:16.922 --> 00:22:18.562
I had to clear my office in parliament.
00:22:18.742 --> 00:22:20.722
I had to clear my ministerial office.
00:22:20.722 --> 00:22:23.862
I had to clear my constituency office.
00:22:23.862 --> 00:22:26.262
Ridiculous stuff like getting rid of all of the equipment.
00:22:26.262 --> 00:22:27.362
You do it all yourself.
00:22:27.362 --> 00:22:28.262
You run a small business.
00:22:28.262 --> 00:22:29.022
There's no help.
00:22:29.342 --> 00:22:31.062
There's no help whatsoever.
00:22:31.062 --> 00:22:39.582
So literally you spend a month making people redundant, doing all those things, getting rid of offices, ending leases, cleaning offices.
00:22:39.822 --> 00:22:42.562
It's a very weird and wonderful thing.
00:22:42.862 --> 00:22:46.182
The plus side was, baby Marina, as you know, I'm only 26.
00:22:46.722 --> 00:22:49.522
So I'm lucky enough that...
00:22:49.522 --> 00:22:52.802
So Flora and I met very late and then we couldn't have children.
00:22:52.802 --> 00:22:58.362
And through the miracle of IVF, we eventually managed to have children after about a 10 year journey.
00:22:58.362 --> 00:23:01.262
And so Kit, my eldest boy, is nearly four.
00:23:01.262 --> 00:23:07.942
And then we decided shortly before the general election in 24, we said, okay, should we try one more time?
00:23:07.942 --> 00:23:09.802
Because we'd had a lot of failures.
00:23:10.962 --> 00:23:14.082
And I said, look, she's about to lose her job.
00:23:15.242 --> 00:23:18.042
I was probably going to lose my job.
00:23:18.042 --> 00:23:18.962
I'm not wealthy.
00:23:18.962 --> 00:23:20.662
I've done 15 years of public service.
00:23:20.662 --> 00:23:25.822
And contrary to everyone's belief that politicians do it for the money, that isn't what you do it for.
00:23:25.822 --> 00:23:28.022
And so we then said, yes, we will.
00:23:28.022 --> 00:23:30.942
And baby Marina popped out a month after the general election.
00:23:30.942 --> 00:23:38.122
And that was an amazing thing, actually, and a very special way of easing your way into a new life.
00:23:38.122 --> 00:23:42.842
And I've been lucky enough to pick up a couple of jobs as advisors to various people.
00:23:43.162 --> 00:23:46.602
I'm doing some really interesting international work in the Middle East.
00:23:46.602 --> 00:23:56.782
And that is fascinating, helping some Middle East countries who are a bit complicated at the moment, try and find their way into retirement systems that are modern.
00:23:56.782 --> 00:23:59.182
And it's been a joy, frankly.
00:23:59.182 --> 00:24:06.102
I'm not quite sure what the future holds, but at the moment, I'm trying very hard to be a really good parent to two small children.
00:24:06.102 --> 00:24:10.782
I got them both up this morning, delivered them both to nursery and have...
00:24:10.802 --> 00:24:11.622
Impressive.
00:24:11.622 --> 00:24:12.842
You're here in London.
00:24:12.842 --> 00:24:18.882
And I'm then, yeah, it's a long story, but I genuinely have done really good stuff.
00:24:18.882 --> 00:24:20.582
It's really interesting.
00:24:20.582 --> 00:24:21.122
Brilliant.
00:24:21.122 --> 00:24:25.002
So I've spotted you popping up all over the world in LinkedIn.
00:24:25.002 --> 00:24:30.662
You've mentioned the Middle East, you've been in Australia, Ireland, you were in Cape Town last week.
00:24:30.662 --> 00:24:38.122
What is your view when you're looking back at the UK pension system from all those other different models?
00:24:38.122 --> 00:24:41.082
So I think we're hard on ourselves.
00:24:41.082 --> 00:24:44.862
You and I go to lots of conferences and everyone's a bit sort of glass half full.
00:24:44.862 --> 00:24:45.102
Yeah.
00:24:45.582 --> 00:24:46.402
Half empty.
00:24:46.402 --> 00:24:46.782
Yeah.
00:24:46.782 --> 00:24:48.642
Well, half empty, frankly.
00:24:50.102 --> 00:24:53.142
Half empty, I should have said rather, or totally empty.
00:24:53.142 --> 00:24:56.402
So we do certain things really well.
00:24:56.402 --> 00:24:59.102
We have an evolving DB with a good pathway.
00:24:59.102 --> 00:25:01.962
The LGPS needs work, but it's doing okay.
00:25:02.502 --> 00:25:06.702
And in DC, we should be really proud of the DC Master Trust world we created.
00:25:06.702 --> 00:25:08.562
You know, it is a success story.
00:25:08.562 --> 00:25:15.082
We have a stroppy 13-year-old is the best description I can give it, because it's created in 2012.
00:25:15.082 --> 00:25:17.262
It's 13 and a half years of age.
00:25:17.262 --> 00:25:19.242
It's not fully formed, right?
00:25:19.242 --> 00:25:26.522
But if you look at the Australians created in 1992, they've got a fully formed 33-year-old DC system, and it is one of the envies of the world.
00:25:26.522 --> 00:25:28.042
We're 20 years away from that.
00:25:28.042 --> 00:25:31.902
And it will be incredible to see the progression of how that goes.
00:25:32.542 --> 00:25:35.962
And we've got much to be very, very proud of.
00:25:35.962 --> 00:25:39.222
I also, listen, I spent three weeks in Australia in November.
00:25:39.222 --> 00:25:43.562
And they are the kings of accumulation, but they are useless at de-cumulation.
00:25:43.562 --> 00:25:46.782
You know, I said to them, well, obviously you have wake-up packs.
00:25:46.782 --> 00:25:48.802
And they went, what's a wake-up pack?
00:25:48.802 --> 00:25:49.322
Genuinely.
00:25:49.322 --> 00:25:51.542
So they have no contact with the member.
00:25:51.542 --> 00:26:00.822
I mean, your app would do well, because they have no contact with the member pretty much between acquisition and, frankly, a week or a month before retirement.
00:26:00.822 --> 00:26:02.722
There is, I mean, there's a few touch points.
00:26:02.722 --> 00:26:03.942
I met someone at Pensions UK.
00:26:03.942 --> 00:26:05.502
I think you sent them over to see us.
00:26:05.502 --> 00:26:07.422
And yeah, exactly what you're saying.
00:26:07.422 --> 00:26:09.082
They're like, well, we don't have anything like this.
00:26:09.082 --> 00:26:10.262
Pensions mirror.
00:26:10.262 --> 00:26:10.962
This is amazing.
00:26:11.502 --> 00:26:11.942
All this.
00:26:11.942 --> 00:26:13.662
They are so far behind.
00:26:13.662 --> 00:26:18.642
And it's astonishing when we beat ourselves up with quality of advice and guidance.
00:26:18.642 --> 00:26:21.762
We beat ourselves up for targeted support.
00:26:21.762 --> 00:26:33.862
Most countries would give their ITs for the problem that we have that we're trying to navigate advice guidance, that we have the quality of the apps amongst various providers, that we're actually developing a dashboard, albeit late, albeit slow.
00:26:33.862 --> 00:26:45.942
But we're actually on the dashboard journey, which the dashboard is going to be the biggest all singing, all dancing dashboard anyone's ever seen given it's doing state, DB, DC, private, everything.
00:26:45.942 --> 00:26:47.862
It's going to be enormous and it's going to be very good.
00:26:47.862 --> 00:26:50.122
So I think it's a lot better.
00:26:50.122 --> 00:26:55.422
There are a few things that I would say we are deficient on.
00:26:55.422 --> 00:26:58.822
Going back to our savings piece, we're just still a nation without savings.
00:26:58.822 --> 00:27:01.682
That's not a good situation to be in.
00:27:01.682 --> 00:27:05.002
I think people don't understand what they've got.
00:27:05.002 --> 00:27:15.122
So if I go into the tap and smile pub in the centre of Hexham, in reality, and I said to everyone, who here has got an auto enrolled DC pension and do they know what it is?
00:27:15.142 --> 00:27:17.462
One in a hundred might know what that is.
00:27:17.462 --> 00:27:22.422
Now, that's got to change over the next few years, but the Australian example shows that that is what happens.
00:27:24.262 --> 00:27:28.742
I would love it that we could rename auto enrolled DC pensions to something like a super.
00:27:28.742 --> 00:27:30.362
Yeah.
00:27:30.362 --> 00:27:35.002
Does it happen in Australia, though, because they're happier talking about money than we are here?
00:27:35.002 --> 00:27:35.602
No.
00:27:35.782 --> 00:27:49.082
There's loads of evidence that shows that it happened in Australia when their pots became sufficiently large, that everybody went, wow, I've got a 50,000 Aussie dollar pot or 100,000 Aussie dollar pot.
00:27:49.082 --> 00:27:49.962
What am I going to do with it?
00:27:50.382 --> 00:27:57.682
And by the way, the individual supers in Australia do amazing comms, really amazing comms and public comms.
00:27:57.682 --> 00:28:05.062
So they, you know, it's not just we would like to invest with Scottish Widows or Aviva or LNG or whatever.
00:28:05.062 --> 00:28:10.162
It's proper engagement with the member in public, in a public space.
00:28:10.162 --> 00:28:13.782
Less about the day-to-day thing.
00:28:13.782 --> 00:28:20.462
But for example, if they do private assets, for example, nurses' housing is the best example.
00:28:20.462 --> 00:28:25.282
I saw it advertised that your pension is making these key worker houses.
00:28:26.102 --> 00:28:27.662
That sort of stuff, they do very well.
00:28:27.662 --> 00:28:29.542
Also, they're 20 years older than us.
00:28:29.542 --> 00:28:33.582
We will change the way we do this when we get Dashboard, when we get other things.
00:28:33.782 --> 00:28:45.662
It will still be interesting to see if the British public are comfortable talking about their money in the way that the Australians are about signing around at the barbecue, chatting about how much is in their supers.
00:28:48.262 --> 00:28:48.862
We'll wait and see.
00:28:49.162 --> 00:28:50.542
It might be a kind of thing that does develop.
00:28:50.542 --> 00:28:54.122
We don't do as many barbecues as well, because it's always raining.
00:28:54.122 --> 00:28:56.142
True.
00:28:56.142 --> 00:29:01.702
Okay, so that's kind of, looking back, it's like we're not as bad as...
00:29:01.702 --> 00:29:04.682
No, I think we are better than we give ourselves credit for.
00:29:04.682 --> 00:29:11.562
We've got a model in Australia for accumulation, but we need to be fixing the retirement space.
00:29:11.562 --> 00:29:14.202
And it's something that we are doing right now.
00:29:14.402 --> 00:29:16.062
So there's loads of focus on retirement right now.
00:29:16.062 --> 00:29:16.582
There really is.
00:29:16.762 --> 00:29:27.422
And when I started that, I remember doing the consultation on de-cumulation, and Nick Sherry, who is my opposite number in Australia, said, you are doing this nearly 18 years earlier than we started.
00:29:27.422 --> 00:29:31.462
They only started a de-cumulation consultation on year 30.
00:29:31.462 --> 00:29:35.022
And we were starting it on year 8, year 9.
00:29:35.022 --> 00:29:37.602
We're miles ahead, miles ahead.
00:29:37.602 --> 00:29:41.802
Okay, so we're looking forward to 2030 on this.
00:29:43.322 --> 00:29:48.542
Today, you're talking at the event later on, your vision of 2030.
00:29:48.542 --> 00:29:53.642
So what I thought I'd do is give you some quickfire questions about 2030.
00:29:53.642 --> 00:29:55.242
It's only four years away.
00:29:55.242 --> 00:30:01.122
At Scotchwood, as we've been calling this decade, the connected 20s, the decade when all your finances become connected together.
00:30:02.782 --> 00:30:04.742
We created that right at the beginning of the decade.
00:30:04.802 --> 00:30:12.502
And six years in, it's probably not as far down the line as I would have expected us to be by this stage, but that's just the way it is.
00:30:12.502 --> 00:30:16.042
So let me go for some questions around some of these things.
00:30:16.042 --> 00:30:21.682
So first and foremost, 2030, will Dashboards be live and will they be game changing?
00:30:21.682 --> 00:30:22.722
Yes and yes.
00:30:22.722 --> 00:30:24.222
I'm very hopeful.
00:30:24.222 --> 00:30:26.682
I'll believe it when I see it, but yes and yes.
00:30:26.702 --> 00:30:28.962
Okay, that's positive.
00:30:28.962 --> 00:30:30.142
What about VFM?
00:30:30.142 --> 00:30:33.262
Do you think that will have changed things for members?
00:30:33.262 --> 00:30:33.822
Yes, I do.
00:30:34.542 --> 00:30:39.802
Clearly, the present draft is not the right draft, in my humble opinion.
00:30:39.802 --> 00:30:46.642
But anything that drives forward a focus on net performance is, in my view, a good thing.
00:30:46.642 --> 00:30:56.142
You will be aware that there are some companies over the last five to 10 years, I'm not going to name names, who have dramatically underperformed.
00:30:56.142 --> 00:30:59.202
And I, as a minister, could do nothing about that.
00:30:59.202 --> 00:31:02.862
Now, in Australia, I, as a minister, could close them down.
00:31:03.142 --> 00:31:07.282
I could move them to a better performing organization.
00:31:07.282 --> 00:31:09.302
And that is a good thing.
00:31:09.302 --> 00:31:19.782
It is the ability of government and regulators to step in and say, you are being grossly unlooked after, badly looked after by your provider.
00:31:19.782 --> 00:31:21.802
And by the way, this should also apply across the board.
00:31:21.802 --> 00:31:25.502
It shouldn't just be DC, it should be DB and LGPS.
00:31:25.502 --> 00:31:28.162
There are some LGPS that have performed terribly, for example.
00:31:28.822 --> 00:31:38.522
I genuinely feel getting a real understanding of performance and then rewarding managers and rewarding providers who do well is a great thing.
00:31:38.522 --> 00:31:41.182
Now, is the devil's in the detail?
00:31:41.182 --> 00:31:44.062
I know people get, oh, well, you can't judge us on this.
00:31:44.062 --> 00:31:49.102
Trust me, other countries, as you know, Australia have been doing net performance for a long period of time.
00:31:49.102 --> 00:31:54.182
Other countries are able to judge DC and DB providers on a long-term basis.
00:31:54.182 --> 00:31:55.762
There's no reason why we can't do it here.
00:31:56.062 --> 00:31:58.542
Yeah, and I think that's the crucial bit of the long-term basis.
00:31:58.542 --> 00:32:06.702
It kind of gets caught up in this idea that if you have a bad one-year performance, you're going to be shut down.
00:32:06.702 --> 00:32:14.802
Well, listen, I think you can do it on a one, three, five, 10-year basis and you can try and do some forward-looking metrics, very hard to do.
00:32:14.802 --> 00:32:19.022
But other countries do this really easily.
00:32:19.022 --> 00:32:27.602
And there are ratings companies, Super Ratings is one, other companies are out there, who will give you this today, quite frankly.
00:32:27.602 --> 00:32:32.522
And my slight nudge to the industry will be, why aren't you doing this now?
00:32:32.522 --> 00:32:36.262
Why don't you just, if you're so good, as you say you are, publish it.
00:32:36.262 --> 00:32:37.402
Publish all your data now.
00:32:37.402 --> 00:32:46.182
Just say, look, this is what we are, because most of our members in most schemes don't understand the performance metrics of that scheme.
00:32:46.182 --> 00:32:47.962
They really don't, in my opinion.
00:32:47.962 --> 00:32:52.222
Well, later on today, I'll show you in the app how we do that and see if you think that can.
00:32:52.322 --> 00:32:52.922
Yeah, good, good.
00:32:52.922 --> 00:32:53.602
I look forward to it.
00:32:53.702 --> 00:32:55.742
We won't be doing an addendum, but...
00:32:55.742 --> 00:32:56.302
It's OK.
00:32:56.302 --> 00:32:56.862
It's OK.
00:32:56.862 --> 00:32:58.342
Yeah, brilliant.
00:32:58.342 --> 00:33:01.722
OK, 2030, any changes to adequacy?
00:33:01.722 --> 00:33:02.822
Sadly, no.
00:33:02.822 --> 00:33:06.082
You might have a road map and one would hope you have a road map.
00:33:06.082 --> 00:33:12.742
My personal view is the any increase will be on the 2nd of May, 2033.
00:33:12.742 --> 00:33:16.802
The reason being is the next general election is on the 1st of May in 2029.
00:33:16.802 --> 00:33:20.042
There's no way that Labour are going to not go very, very long.
00:33:20.522 --> 00:33:24.902
Four years after that is the 1st of May, 2033.
00:33:24.902 --> 00:33:33.682
So you'd implement the change on the 2nd of May, so that politically you don't need to worry about the implementation, because that has consequences of treasuries and things like that.
00:33:33.682 --> 00:33:37.322
But at the same stage, you at least have a road map that you pass the legislation.
00:33:37.322 --> 00:33:38.962
That's the key thing.
00:33:38.962 --> 00:33:40.382
Okay.
00:33:40.382 --> 00:33:46.042
But you won't get an increase above 8% before 2030, in my view.
00:33:46.102 --> 00:33:46.922
Okay.
00:33:46.922 --> 00:33:47.342
Yeah.
00:33:47.342 --> 00:33:50.702
I mean, there doesn't seem to be much noise suggesting that we will, so.
00:33:50.702 --> 00:34:01.322
My worry is, for example, the pension commission doesn't report back, and then the Labour government doesn't respond to it, and we're suddenly into a general election, and then we are properly long grass.
00:34:01.322 --> 00:34:01.722
Yeah.
00:34:01.722 --> 00:34:05.122
So my next question was about pension commission.
00:34:05.122 --> 00:34:07.342
Do you think, what do you think will come out of that?
00:34:07.342 --> 00:34:07.922
It's a good thing.
00:34:07.922 --> 00:34:08.862
Listen, it's a good thing.
00:34:08.862 --> 00:34:10.302
I know Jeannie Drake and others.
00:34:10.302 --> 00:34:26.362
I think I tried to persuade the Labour government to make it cross party, put a bunch of other political parties on it, because the problem is, if it's one political party proposing one scenario, it becomes a political football.
00:34:26.362 --> 00:34:28.342
And that is not a good thing.
00:34:28.342 --> 00:34:30.002
They have chosen not to do that.
00:34:30.002 --> 00:34:31.042
I know Jeannie well.
00:34:31.042 --> 00:34:33.262
She's a very competent lady.
00:34:33.262 --> 00:34:37.102
And she's clearly, you know, she's in the original Turner Commission.
00:34:37.102 --> 00:34:43.962
But at the same stage, I will believe the outcomes being implemented when I see it.
00:34:43.962 --> 00:34:46.042
Yeah, not by 2030.
00:34:46.182 --> 00:34:47.422
I don't see it personally.
00:34:47.422 --> 00:34:48.662
I know Treasury too well.
00:34:48.662 --> 00:34:50.322
I'd love to be proven wrong.
00:34:50.322 --> 00:34:55.822
But Treasury have proven to me on a repeat basis that they block stuff.
00:34:55.822 --> 00:34:56.882
Under successive governments.
00:34:56.882 --> 00:35:00.862
It's not just this government, but they'll do it under this government for sure.
00:35:00.862 --> 00:35:05.162
And more about AI in the world of workplace savings.
00:35:05.162 --> 00:35:06.202
What kind of disruption?
00:35:06.282 --> 00:35:07.222
What do you think?
00:35:07.222 --> 00:35:10.022
What impact will it be having by 2030?
00:35:10.022 --> 00:35:10.722
I think a lot.
00:35:11.302 --> 00:35:12.622
A genuinely large amount.
00:35:12.622 --> 00:35:26.662
You know, there is no question that AI and is going to transform the way you get managed, sort of nudged advice and scenario planning basically.
00:35:26.662 --> 00:35:28.482
And that is it's already happening.
00:35:28.482 --> 00:35:36.222
We can see that all the all companies are creating AI bots to try and navigate you through the particular processes.
00:35:36.222 --> 00:35:40.402
I also think there is a massive swathe of jobs that are going to disappear.
00:35:42.242 --> 00:35:56.542
And I also think you're going to get AI taking over things like investment strategies and in a way that we, at the moment we pay very nice people very good money to do analysis and things like that.
00:35:56.542 --> 00:36:05.862
I asked one of the particular providers, co-pilots to do me a paper and it did me a paper in like five minutes.
00:36:05.862 --> 00:36:11.042
And I thought, wow, this is, and it would probably take me a day or two to write said paper.
00:36:11.042 --> 00:36:16.662
Now, I then had to play around with it and prove it, but the way that code is developing is astonishing.
00:36:16.662 --> 00:36:17.182
Yeah.
00:36:17.182 --> 00:36:18.042
Yeah.
00:36:18.042 --> 00:36:20.742
I don't think we'd disagree with much of that.
00:36:22.022 --> 00:36:29.642
And to kind of finish us off, what one thing do you think employers could do to really help the workforce retire better?
00:36:29.642 --> 00:36:37.562
So, I'm a massive fan of additional provision by an employer, and I've got good examples of this.
00:36:37.562 --> 00:36:41.302
So, obviously, you've got the bog standard 8%, okay?
00:36:41.302 --> 00:36:44.082
Now, some employers choose to auto-escalate.
00:36:44.082 --> 00:36:50.362
So, FTSE 100 employers tend to say, we like you so much, we're going to give you another 5 or 10%, right?
00:36:50.622 --> 00:36:56.222
I actually, even though I'm the former pensions minister, and I'm a big fan of pensions, I don't think they should do that.
00:36:56.222 --> 00:37:07.782
What I'd like them to be doing is I'd like to be re-offering their employees, first of all, rainy day savings, give them a 1% rainy day savings is a bog standard thing that every young employee should have in my view.
00:37:07.782 --> 00:37:18.182
The second would be things like housing deposit funds, and it's transformational in terms of productivity, stickability of employees.
00:37:18.182 --> 00:37:29.782
And I also feel that if you want pensions to have long-term resonance for Gen Z and beyond, you have to address the fact that most of them can't afford a house.
00:37:29.782 --> 00:37:30.722
Right?
00:37:30.722 --> 00:37:33.742
And pensions are deferred earnings, right?
00:37:33.922 --> 00:37:43.302
And if they genuinely have to feel there's no prospect of getting a flat or accommodation, why would they then engage with deferred earnings into a pension?
00:37:43.302 --> 00:37:50.842
So to protect pensions, bizarrely, I think you should be taking some money and investing it in housing deposit funds and things like that.
00:37:50.842 --> 00:38:00.282
Helping them on a journey, and I feel that if providers and employers did that, it would improve the outcomes on pensions.
00:38:00.282 --> 00:38:02.462
Less people would drop out, that's my big concern.
00:38:03.002 --> 00:38:08.242
And more particularly, you would genuinely transform productivity and retention of the employees.
00:38:08.242 --> 00:38:15.962
You think that's a more effective way than allowing people to take money out of their pension for their first house?
00:38:15.962 --> 00:38:23.242
So I was asked to look at this by Lloyd's, but a few years ago, and got into trouble with the FT, and Joe Cumbo has always had a pop at me.
00:38:25.002 --> 00:38:26.482
And plus ça change there.
00:38:26.482 --> 00:38:36.762
But the practical reality is, if there is a sufficient amount of money in the pot, I see no reason why you can't do that.
00:38:36.762 --> 00:38:38.162
So it's really simple.
00:38:38.422 --> 00:38:42.662
I give my money to an asset manager to invest in a balanced portfolio.
00:38:42.662 --> 00:38:44.242
He invests in property.
00:38:44.242 --> 00:38:49.862
But I personally am not considered a safe enough bet that I can invest in property with my pension.
00:38:49.862 --> 00:38:55.282
Now, I find that slightly illogical, given the amount of money I'm already paying for rent and things like that.
00:38:55.282 --> 00:38:59.522
So I genuinely think that we can find a way on this.
00:38:59.522 --> 00:39:05.002
And I'm helping in a very small way the South Africans who've created a two pot system.
00:39:05.002 --> 00:39:15.322
And you are able in South Africa to extract some money in certain circumstances, hence why it's called a two pot system, to do other things with it or from your pension.
00:39:15.382 --> 00:39:23.682
And the evidence there, early days, it's only been going a year or so, is that people are extracting some money to do things like housing deposits.
00:39:23.682 --> 00:39:24.102
Okay.
00:39:24.102 --> 00:39:25.062
Fascinating.
00:39:25.062 --> 00:39:27.542
Okay, Guy, it's been brilliant having you on today.
00:39:27.542 --> 00:39:35.942
You've played such a big role in recent pensions landscape, love that you've been so grounded and so invested in trying to help people to do better.
00:39:36.062 --> 00:39:37.822
And also to claim what they're entitled to actually.
00:39:37.822 --> 00:39:39.862
We didn't talk about pension credits today.
00:39:39.862 --> 00:39:43.682
That's another thing that you championed as well, even TV adverts, wasn't it?
00:39:43.922 --> 00:39:50.082
The amazing Len Goodman and I did a fantastic version of Strictly Come Dancing.
00:39:50.082 --> 00:39:51.402
I remember it.
00:39:51.402 --> 00:39:56.942
And yeah, pension credit and various other beneficial entitlements were something I was very big on.
00:39:56.942 --> 00:39:57.382
Yeah.
00:39:57.382 --> 00:40:02.342
And you actually created a pension engagement season as well?
00:40:02.342 --> 00:40:08.922
Probably the best legacy was trying to drive a bunch of providers to really, really get involved in this.
00:40:08.922 --> 00:40:11.182
Personally, I think it should be even bigger than it is already.
00:40:11.882 --> 00:40:21.822
And I had this pretty much, as always with the pension industry, I had to threaten them that I was going to do it and force them to do it before they all then went, yes, okay, we'll do it anyway.
00:40:21.822 --> 00:40:22.022
Yeah.
00:40:22.022 --> 00:40:23.262
It's a really cool thing they're doing.
00:40:23.262 --> 00:40:24.402
No, it's good.
00:40:24.402 --> 00:40:27.182
It's really great to be part of that.
00:40:27.182 --> 00:40:29.702
So a lot of great stuff to look back on.
00:40:29.702 --> 00:40:36.942
I mean, it's clear that you're still really engaged in adding value in the global pension ecosystem now that you've upped from just the UK.
00:40:36.942 --> 00:40:39.722
So thanks so much for taking time to join us today.
00:40:40.302 --> 00:40:41.722
I hope you've enjoyed it too.
00:40:41.722 --> 00:40:42.282
I have indeed.
00:40:42.282 --> 00:40:43.242
Thanks for having me on.
00:40:43.242 --> 00:40:43.582
Brilliant.
00:40:43.582 --> 00:40:44.822
Thank you so much, Guy.
00:40:44.822 --> 00:40:47.022
It just remains for me to thank everyone for listening today.
00:40:47.022 --> 00:40:51.982
We don't have Pensions Royalty on every podcast, but there's loads of great content.
00:40:51.982 --> 00:40:55.282
So if you've enjoyed this session, it would be great to have you as a regular listener.
00:40:55.282 --> 00:40:56.382
So please subscribe.
00:40:56.382 --> 00:40:57.342
Loads more coming soon.
00:40:57.342 --> 00:40:59.622
But for now, thanks to you all.
00:40:59.622 --> 00:41:00.402
Until next time.
